FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DENISE ROSE, SCOTT RAITT, 

SALVADOR ABEYTA, and LEA REIS,

on behalf of themselves and all No. 05-56850

persons similarly situated, D.C. No.

Plaintiffs-Appellants,  CV-05-0754-JVS

v. OPINION

CHASE BANK USA, N.A.,

Defendant-Appellee. 

Appeal from the United States District Court

For the Central District of California

James V. Selna, District Judge, Presiding

Argued and Submitted

August 8, 2007—Pasadena, California

Filed January 23, 2008

Before: Alex Kozinski, Chief Judge, Johnnie B. Rawlinson,

Circuit Judge, and Harold Baer, Jr.,* Senior District Judge.

Opinion by Judge Baer

*The Honorable Harold Baer, Jr., Senior United States District Judge

for the Southern District of New York, sitting by designation. 

999
COUNSEL

Jeffrey Wilens, Lakeshore Law Center, Yorba Linda, California, for the plaintiffs-appellants. 

Laurence J. Hutt, Howard N. Cayne, Nancy L. Perkins,

Arnold & Porter, Los Angeles, California, for the defendantappellee. 

OPINION

BAER, Senior District Judge: 

Plaintiffs-Appellants Denise Rose, Scott Raitt, Salvador

Abeyta, and Lea Reis (“Plaintiffs”), ostensibly on behalf of

themselves and all others similarly situated, appeal the district

court’s grant of judgment on the pleadings pursuant to Fed. R.

Civ. P. 12(c) to Defendant Chase Bank USA, N.A. (“Chase”

or “Defendant”) on all claims.1

We affirm the district court’s grant of judgment on the

pleadings on all claims. 

I. BACKGROUND

The following facts are taken from Plaintiff’s First

Amended Complaint and are taken as true for the purpose of

reviewing a motion for judgment on the pleadings. See Torbet

1Defendant Chase Bank USA, N.A. was formerly known as Chase Manhattan Bank USA, N.A., under which name Defendant was originally

sued. 

1002 ROSE v. CHASE BANK USA
v. United Airlines, Inc., 298 F.3d 1087, 1089 (9th Cir. 2002)

(“Judgment on the pleadings is proper when, taking all the

allegations in the pleadings as true, the moving party is entitled to judgment as a matter of law.”). 

Plaintiffs, all California residents, brought this action on

behalf of an ostensible class of California holders of credit

cards issued by Chase. Chase, at various points after June 13,

2001, extended credit to its credit card holders by mailing

them a preprinted check or draft, more commonly known as

a “convenience check.” The “convenience checks” were (and

are) commonly attached to a letter or invitation from the bank,

and perforated so that they can be torn off and used. That convenience check, if torn off and cashed, resulted in a charge

against the user’s credit card account, as well as associated

finance charges or transaction fees. Plaintiffs cashed those

convenience checks and incurred those charges or fees. 

Cal. Civ. Code § 1748.9, which became operative on July

1, 2000, provides in full: 

(a) A credit card issuer that extends credit to a

cardholder through the use of a preprinted

check or draft shall disclose on the front of an

attachment that is affixed by perforation or

other means to the preprinted check or draft, in

clear and conspicuous language, all of the following information:

(1) That “use of the attached check or draft

will constitute a charge against your credit

account.” 

(2) The annual percentage rate and the calculation of finance charges, as required by

Section 226.16 of Regulation Z of the Code

of Federal Regulations, associated with the

use of the attached check or draft. 

ROSE v. CHASE BANK USA 1003
(3) Whether the finance charges are triggered immediately upon the use of the

check or draft. 

According to Plaintiffs, when Chase mailed its credit card

holders a convenience check, Chase did not include or attach

language pursuant to Cal. Civ. Code § 1748.9(a)(1) that “use

of the attached check . . . will constitute a charge against

[Plaintiff’s] credit account.” Chase also did not disclose, pursuant to § 1748.9(a)(3), whether the finance charges would be

triggered immediately upon the use of the check. Id. 

Plaintiffs accordingly brought three causes of action against

Chase. Plaintiffs’ first claim is that Chase violated California’s Unfair Competition Law (“UCL”), see Cal. Bus. & Prof.

Code § 17200 et seq., by committing an “unlawful” business

practice, owing to Chase’s alleged violations of Cal. Civ.

Code § 1748.9(a)(1) and (a)(3) when it failed to make the pursuant disclosures. Plaintiffs’ second claim is that Chase violated California’s UCL by committing a “fraudulent” business

practice, or engaging in “deceptive or misleading advertising”

when it failed to make those disclosures (regardless of

whether Chase’s actions violated Cal. Civ. Code § 1748.9).

Plaintiffs’ third claim is that Chase violated California’s UCL

by committing an “unfair” business practice when it failed to

make those disclosures (again, regardless of whether its

actions violated Cal. Civ. Code § 1748.9). 

After removing the case to federal court, Chase moved for

judgment on the pleadings on all three of Plaintiffs’ claims.

Chase argued that the National Bank Act (“NBA”), 12 U.S.C.

§ 21 et seq., as well as regulations promulgated thereunder by

the federal Office of the Comptroller of the Currency

(“OCC”), see 12 CFR § 7.4008, preempt the California laws

upon which Plaintiffs based their three claims. 

The National Bank Act provides, in relevant part, that

nationally chartered banks may exercise “all such incidental

1004 ROSE v. CHASE BANK USA
powers as shall be necessary to carry on the business of banking [such as] . . . by loaning money on personal security.” 12

U.S.C. § 24 (Seventh). 

The OCC regulations at issue here, effective February 12,

2004,2 further provide that “[a] national bank may make, sell,

purchase, participate in, or otherwise deal in loans and interests in loans that are not secured by liens on, or interests in,

real estate, subject to such terms, conditions, and limitations

prescribed by the Comptroller of the Currency and any other

applicable Federal law.” 12 CFR § 7.4008(a). 

Further, with regard to the applicability of state law, the

OCC regulations provide in relevant part: 

(d) Applicability of state law. 

(1) Except where made applicable by Federal law, state laws that obstruct, impair, or

condition a national bank’s ability to fully

exercise its Federally authorized non-real

estate lending powers are not applicable to

national banks. 

(2) A national bank may make non-real

estate loans without regard to state law limitations concerning . . . 

(viii) Disclosure and advertising, including laws requiring specific statements,

information, or other content to be

included in credit application forms,

credit solicitations, billing statements,

credit contracts, or other credit-related

documents . . . 

2

See 69 Fed. Reg. 1904 (2004). 

ROSE v. CHASE BANK USA 1005
12 CFR § 7.4008(d). 

The district court, finding that the NBA and the OCC regulations preempted Plaintiffs’ claims, granted Chase’s motion

for judgment on the pleadings in its entirety and entered judgment on November 3, 2005. See Rose v. Chase Manhattan

Bank USA, N.A., 396 F. Supp. 2d 1116 (C.D. Cal. Oct. 27,

2005); ER 110-113 (district court’s judgment). Plaintiffs

timely appealed. 

II. STANDARD OF REVIEW

This Court reviews de novo an order granting a motion for

judgment on the pleadings. See Milne ex rel. Coyne v. Stephen

Slesinger, Inc., 430 F.3d 1036, 1042 (9th Cir. 2005).

“[J]udgment on the pleadings is properly granted when, taking all the allegations in the pleadings as true, the moving

party is entitled to judgment as a matter of law.” Id. Concomitantly, this Circuit reviews de novo a district court’s decision

that state claims are preempted by federal law. See Olympic

Pipe Line Co. v. City of Seattle, 437 F.3d 872, 877 n.12 (9th

Cir. 2006). 

III. DISCUSSION

Plaintiffs primarily advance three contentions on appeal.

First, Plaintiffs contend that the NBA does not preempt Cal.

Civ. Code § 1748.9, and accordingly, because Defendants

have violated Cal. Civ. Code § 1748.9 and thus committed an

“unlawful” business practice within the meaning of California’s UCL, Plaintiffs’ first claim survives. Secondly, Plaintiffs

contend that the OCC regulations do not alternatively and

concurrently preempt Cal. Civ. Code § 1748.9, and thus

Plaintiffs’ first claim still survives. Third, Plaintiffs contend

that even if Plaintiffs’ first claim that alleges “unlawful” business practices is preempted, Plaintiffs’ second and third

claims that allege “fraudulent” and “unfair” business prac1006 ROSE v. CHASE BANK USA
tices, respectively (without explicit reliance on Cal. Civ. Code

§ 1748.9) are not preempted. 

Plaintiffs’ contentions, addressed below seriatim, are

rejected. 

A. NBA Preemption of Cal. Civ. Code § 1748.9 

[1] “Nearly two hundred years ago . . . [the Supreme] Court

held federal law supreme over state law with respect to

national banking.” Watters v. Wachovia Bank, N.A., 127

S. Ct. 1559, 1566 (2007) (citing McCulloch v. Maryland, 17

U.S. 316 (1819)). “In 1864, Congress enacted the NBA,

establishing the system of national banking still in place

today.” Id. (citations omitted). The Act vested in nationally

chartered banks enumerated powers and “all such incidental

powers as shall be necessary to carry on the business of banking.” Id. (citing 12 U.S.C. § 24 (Seventh)). Those incidental

powers include the power to “loan money on personal security,” which is at issue in the instant case. See 12 U.S.C. § 24

(Seventh); see also Wells Fargo Bank N.A. v. Boutris, 419

F.3d 949, 959 n.13 (9th Cir. 2005). 

[2] The Supreme Court has interpreted grants of “powers”

to national banks as “grants of authority not normally limited

by, but rather ordinarily pre-empting, contrary state law.”

3

Watters, 127 S. Ct. at 1567 (citing Barnett Bank of Marion

County, N.A. v. Nelson, 517 U.S. 25, 32 (1996)); accord

Boutris, 419 F.3d at 956 (citing Bank of Am. v. City of San

Francisco, 309 F.3d 551, 558 (9th Cir. 2002)). Accordingly,

“the usual presumption against federal preemption of state

law is inapplicable to federal banking regulation.” Boutris,

419 F.3d at 956 (citing Bank of Am., 309 F.3d at 558-59); see

also Barnett Bank, 517 U.S. at 32. 

3

If Congress enacts a federal statute with the intent to exercise its constitutionally delegated authority to set aside the laws of a state, the

Supremacy Clause requires courts to follow federal, not state, law. See

Barnett Bank, 517 U.S. at 30 (citing U.S. Const. art. VI, cl.2). 

ROSE v. CHASE BANK USA 1007
[3] “Federally chartered banks are subject to state laws of

general application in their daily business to the extent such

laws do not conflict with the letter or the general purposes of

the NBA.” Watters, 127 S. Ct. at 1567 (citing Atherton v.

FDIC, 519 U.S. 222, 223 (1997); Davis v. Elmira Sav. Bank,

161 U.S. 275, 290 (1896)); see also Bank of Am., 309 F.3d at

558-59. “However, ‘the States can exercise no control over

[national banks], nor in any wise affect their operation, except

in so far as Congress may see proper to permit. Any thing

beyond this is an abuse, because it is the usurpation of power

which a single State cannot give.’ ” Watters, 127 S. Ct. at

1567 (quoting Farmers’ and Mechanics’ Nat’l Bank v. Dearing, 91 U.S. 29, 34 (1875)). “States are permitted to regulate

the activities of national banks where doing so does not prevent or significantly interfere with the national bank’s or the

national bank regulator’s exercise of its powers. But when

state prescriptions significantly impair the exercise of authority, enumerated or incidental under the NBA, the State’s regulations must give way.” Id. (citing Franklin Nat’l Bank of

Franklin Square v. New York, 347 U.S. 373, 377-79 (1954);

Barnett Bank, 517 U.S. at 32-34); see also Boutris, 419 F.3d

at 963 (citing Bank of Am., 309 F.3d at 559). 

[4] Accordingly, following Supreme Court precedent, we

have held that “normally Congress would not want States to

forbid, or to impair significantly, the exercise of a power that

Congress explicitly granted.” Bank of Am., 309 F.3d at 561

(citing Barnett Bank, 517 U.S. at 33). Congress, when it

enacted the NBA, explicitly granted such a power here. The

NBA specifically enumerates, without limitation, as one “incidental power” of a national bank the power to “loan money

on personal security.” See 12 U.S.C. § 24 (Seventh); see also

Boutris, 419 F.3d at 959 n.13. That power to “loan money on

personal security” is the power pursuant to which Chase here

extends credit to its cardholders via convenience checks.

Where, as here, Congress has explicitly granted a power to a

national bank without any indication that Congress intended

for that power to be subject to local restriction, Congress is

1008 ROSE v. CHASE BANK USA
presumed to have intended to preempt state laws such as Cal

Civ. Code § 1748.9. See Barnett Bank, 517 U.S. at 33-35; see

also Franklin, 347 U.S. at 378; cf. Watters, 127 S. Ct. at 1570

(“[I]n analyzing whether state law hampers the federally permitted activities of a national bank, we have focused on the

exercise of a national bank’s powers.”) (emphasis in original).

[5] We are thus constrained by the holdings of Barnett

Bank and Franklin to find that the NBA preempts the disclosure requirements of Cal. Civ. Code 1748.9, insofar as those

requirements apply to national banks.4 Accordingly, the district court correctly found that Plaintiffs’ first claim under

California’s UCL must be dismissed, as Plaintiffs’ first claim

rests on the predicate that Chase’s actions are “unlawful”

under Cal. Civ. Code 1748.9. 

B. Plaintiffs’ Second and Third UCL Claims 

[6] Plaintiffs alternatively contend that even if their first

claim—that Chase committed “unlawful” business practices

—fails because Cal. Civ. Code § 1748.9 is preempted, their

second and third claims—that Chase committed “deceptive”

or “unfair” business practices—survive because those claims

are not predicated on a violation of § 1748.9. Regardless of

the nature of the state law claim alleged, however, the proper

inquiry is whether the “legal duty that is the predicate of”

Plaintiffs’ state law claim falls within the preemptive power

of the NBA or regulations promulgated thereunder. See Cipollone v. Liggett Group, Inc., 505 U.S. 504, 524 (1992). Here,

from the face of Plaintiffs’ complaint, the district court cor4Plaintiffs alternatively contended on appeal that we should remand to

the district court for further discovery regarding the issue of whether the

state law constitutes a “significant” impairment or interference with the

purposes of the National Bank Act. Given the prior holdings of Barnett

Bank and Franklin, however, it appears that no amount of discovery

would change the central holding that Congress intended for the NBA to

preempt state restrictions on national banks such as Cal. Civ. Code

§ 1748.9 here. 

ROSE v. CHASE BANK USA 1009
rectly found that Defendants’ alleged legal duties that underlie

Plaintiffs’ UCL claims for “deceptive” or “unfair” business

practices are the same purported duties to disclose imposed by

Cal. Civ. Code § 1748.9, and that are preempted by the NBA

and OCC regulations. See Rose v. Chase Manhattan Bank

USA, N.A., 396 F. Supp. 2d at 1123. Accordingly, the district

court correctly dismissed Plaintiffs’ second and third claims.

IV. CONCLUSION

The district court’s grant of judgment on the pleadings to

Defendant on all claims is AFFIRMED. 

1010 ROSE v. CHASE BANK USA