1994 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

10-27-1994

IN RE: Corestates Trust

Precedential or Non-Precedential:

Docket 93-2039

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Recommended Citation

"IN RE: Corestates Trust" (1994). 1994 Decisions. Paper 170.

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UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

_________________ 

No. 93-2039 

_________________ 

IN RE: CORESTATES TRUST FEE LITIGATION 

CORNELIA TODD HARRISON BYRD; 

HOWARD W. HARRISON, III 

Individually and on behalf of 

all others similarly situated 

v. 

CORESTATES BANK, N.A. 

 Howard W. Harrison, III and James D. Robins*, 

 Appellants

* Pursuant to FRAP 12(a) 

____________________________________________________ 

On Appeal From the United States District Court 

for the Eastern District of Pennsylvania 

(D.C. Civil No. 92-cv-05526) 

____________________________________________________ 

Argued: May 20, 1994 

Before: BECKER, LEWIS, Circuit Judges

and IRENAS, District Judge*

(Filed October 27, l994 ) 

 MARGUERITE R. GOODMAN (Argued) 

 One Old Gulph Center 

 111 Old Gulph Road 

 Wynnewood, PA 19096 

 

*. The Honorable Joseph E. Irenas, United States District Judge 

for the District of New Jersey, sitting by designation. 
 Attorney for Appellants

 GREGORY M. HARVEY (Argued) 

 KAREN PIESLAK POHLMANN 

 Morgan, Lewis & Bockius 

 2000 One Logan Square 

 Philadelphia, PA 19103 

 Attorneys for Appellee

 ___________________________ 

 OPINION OF THE COURT

 ___________________________ 

BECKER, Circuit Judge. 

 Plaintiffs Howard W. Harrison, III and James D. Robins, 

beneficiaries of fiduciary accounts administered by defendant 

Corestates Bank, N.A. ("Corestates"), commenced this action in 

the District Court for the Eastern District of Pennsylvania on 

their own behalf and on behalf of all those similarly situated. 

Plaintiffs allege breach of contract and fiduciary duty by 

Corestates and correspondingly seek refund of allegedly 

unreasonable trust fees and removal of Corestates as trustee. 

Jurisdiction was premised on both diversity of citizenship, 28 

U.S.C. § 1332, and the putative existence of a federal question 

based upon violations of the banking laws, 12 U.S.C. § 92a and 

applicable regulations. 

 The district court dismissed the diversity claim for lack of 

subject matter jurisdiction, Fed. R. Civ. P. 12(b)(1), concluding 

that neither the plaintiffs' claim for punitive damages nor their 
allegation that the defendants had mismanaged a trust res worth 

more than $50,000 sufficiently augmented their otherwise minimal 

claims to satisfy the amount in controversy requirement of the 

diversity statute. The court dismissed the federal statutory 

claim, concluding that no private right of action exists for 

violations of 12 U.S.C. § 92a. The plaintiffs appealed the 

district court's order of dismissal, but we agree with the 

district court in both respects, and hence we will affirm. 

 

 I. FACTS AND PROCEDURAL HISTORY 

 Corestates functions as a trustee for a multitude of trusts, 

managing and investing principal and/or income in exchange for 

fees. In order to maximize the return on the trust funds, 

Corestates "sweeps" the fiduciary accounts on a daily basis; 

"sweeping" refers to the automated collection of idle cash from 

customer accounts for purposes of temporary collective 

investment. Corestates transfers the uninvested cash from each 

account to a temporary collective investment fund. At relevant 

times, Corestates has charged sweep fees of 60 basis points ($.60 

for every $100 of invested cash) for the "service" of sweeping. 

App. at 33a. In addition, Corestates has imposed an annual 

regulatory compliance charge of $600 for trusts with principal in 

excess of $50,000 ($300 for those with less than $50,000 of 

principal). App. at 19a. 
 The plaintiffs are beneficiaries of trusts administered by 

Corestates which are subject to these fees. They allege that 

Corestate's imposition of the fees constitutes a breach of 

contract and a breach of fiduciary duty under applicable 

Pennsylvania law. More specifically, plaintiffs allege 

Corestates has violated 20 Pa. C.S.A. § 7315.1(b), which permits 

a Pennsylvania fiduciary to make only a "reasonable charge for 

services rendered in making [a] temporary investment." Harrison 

seeks compensatory damages of $2,474.88 ($1,874.88 of sweep fees 

plus the $600 regulatory compliance fee). Robins seeks 

compensatory damages of $713.97 ($113.97 of sweep fees plus the 

$600 regulatory compliance fee). App. at 45a. Because these 

amounts are far less than the $50,000 required for diversity 

jurisdiction, plaintiffs assert that the jurisdictional amount is 

achieved either (1) via their claim for punitive damages; and/or 

(2) because the value of the trust res, which they allege the 

trustees have been mismanaging, exceeds the jurisdictional 

amount. Although plaintiffs have also brought this action "on 

behalf of all those similarly situated," they have not sought 

(and therefore have not obtained) class action certification. 

 In addition, plaintiffs contend that Corestate's imposition 

of the above mentioned fees constitutes a violation of 

regulations promulgated pursuant to 12 U.S.C. § 92a. More 

specifically, plaintiffs contend that a federal private right of 

action exists for Corestates' alleged regulatory violations. As 
we have noted, the district court was unpersuaded on both of 

plaintiffs' theories, and dismissed the case. This appeal 

followed. 

 The existence vel non of subject matter jurisdiction is a 

legal issue over which we exercise plenary review. York Bank & 

Trust Co. v. Federal Savings & Loan Ins. Corp., 851 F.2d 637, 638 

(3d Cir. 1988), cert. denied 488 U.S. 1005 (1989). So is the 

existence of a private right of action. See Unger v. National 

Residents Matching Program, 928 F.2d 1392, 1394 (3d Cir. 1991). 

In making these legal determinations, all facts alleged in the 

complaint and all reasonable inferences that can be drawn from 

them must be accepted as true. See Markowitz v. Northeast Land 

Co., 906 F.2d 100, 103 (3d Cir. 1990). 

 II. JURISDICTIONAL AMOUNT

 Diversity jurisdiction requires an amount in controversy 

exclusive of interest and costs in excess of $50,000. 28 U.S.C. 

§ 1332(a). In determining whether the jurisdictional amount has 

been has been properly alleged: 

 [T]he sum claimed by the plaintiff controls if the 

claim is apparently made in good faith. It must appear 

to a legal certainty that the claim is really for less 

than the jurisdictional amount to justify dismissal. . 

. . But if, from the face of the pleadings, it is 

apparent, to a legal certainty, that the plaintiff 

cannot recover the amount claimed, or if, from the 

proofs, the court is satisfied to a like certainty that 

the plaintiff never was entitled to recover that 

amount, and that his claim was therefore colorable for 

the purpose of conferring jurisdiction, the suit will 

be dismissed. 
St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288-

89, 58 S. Ct. 586, 590 (1938) (citations omitted). Even in 

diversity-based class actions, the Supreme Court has held that 

class members may not aggregate their claims in order to reach 

the requisite amount in controversy, Snyder v. Harris 394 U.S. 

332, 338, 89 S. Ct. 1053, 1057 (1969), and that each member of 

the class must claim at least the jurisdictional amount, Zahn v. 

International Paper Co., 414 U.S. 291, 301, 94 S. Ct. 505, 512 

(1973). A fortiori, the plaintiffs may not aggregate their 

claims in an action pursued on behalf of "those similarly 

situated." 

 A. Punitive Damages 

 Whether a sufficient amount in controversy exists to 

establish federal diversity jurisdiction depends, in part, on 

whether punitive damages are recoverable under Pennsylvania law. 

Unfortunately, we lack the benefit of direct guidance from the 

Pennsylvania Supreme Court in this area. Therefore this court 

must attempt to "predict the position which that court would take 

in resolving this dispute." Robertson v. Allied Signal, Inc., 

914 F.2d 360, 364 (3d Cir. 1990). 

 In Packard v. Provident Nat'l Bank, 994 F.2d 1039 (3d Cir. 

1993), cert. denied, 114 S. Ct. 440 (1993), we were presented 

with the identical question of Pennsylvania law -- whether the 

imposition of unreasonable sweep fees by a bank acting as a 
trustee can result in the imposition of punitive damages. The 

district court in Packard found that sweep fees, imposed at a 

lower rate then presented here, were unreasonable and in 

violation of applicable Pennsylvania laws, grounding diversity 

jurisdiction on an award of punitive damages in the amount of 

$75,000. Upp v. Mellon Bank N.A., 799 F. Supp. 540 (E.D. Pa. 

1992). On appeal, predicting what the Pennsylvania Supreme Court 

would do, we concluded that "punitive damages simply cannot be 

recovered against a trustee under Pennsylvania law." Id. at 

1048. We are bound by the holding of this previous panel "in the 

absence of a clear statement by the Pennsylvania Supreme Court to 

the contrary or other persuasive evidence of a change in 

Pennsylvania law." Smith v. Calgon Carbon Corp., 917 F.2d 1338, 

1343 (3d Cir. 1990), cert. denied 499 U.S. 966 (1991); see also

Third Circuit Internal Operating Procedure 9.1 (requiring that no 

subsequent panel of this court overrule the holding of a prior 

panel contained in a published opinion so as to avoid an intracircuit conflict of precedent). 

 The Pennsylvania Supreme Court has not addressed the issue 

since that time (nor has the Pennsylvania Superior Court).

 Calgon does not allow us to examine this issue anew, but 

instead requires us to determine whether opinions of inferior 

state courts subsequent to Packard represent persuasive evidence 

of a change in Pennsylvania law. In determining that punitive 

damages were not available, the Packard court relied in part on 
Freedman Estate, 1 Fid. Rep. 2d 60 (O.C. Allegheny Co. 1980) (en 

banc), which held that punitive damages were not available 

against a trustee. Plaintiffs contend that two later trial court 

opinions -- Lemke Trust 13 Fid. Rep. 2d 328 (O.C. Dauphin Cty. 

1993) and Korman Corp. v. Franklin Town Corp., 34 D & C 3d 495 

(C.C.P. Phila. Cty. 1984) (both holding, contrary to the opinion 

in Freedman Estate, that punitive damages were available against 

a trustee) -- which were not considered by Packard1 constitute 

persuasive evidence of a change in Pennsylvania law. 

 We find that these cases do not represent a change in 

Pennsylvania law, and certainly not a sufficient evidence of a 

change to satisfy Calgon. See Calgon, 917 F.2d at 1343. In 

Calgon this court refused to overrule a prior panel's prediction 

that the employment-at-will doctrine existed in Pennsylvania 

notwithstanding two subsequent direct statements to the contrary 

by members of the Pennsylvania Supreme Court, one in dicta, and 

the other in a concurrence by Chief Justice Nix. Id. (requiring 

instead a "clear statement by the Pennsylvania Supreme Court to 

the contrary"). Given the absence in our case of such persuasive 

evidence of a change in Pennsylvania law, we find that punitive 

damages are not available against Corestates. Thus plaintiffs' 

claim for punitive damages does not establish an amount in 

controversy in excess of $50,000. 

 

1. The Lemke decision arose after Packard, while the Korman

case, decided before Packard, was apparently not called to the 

attention of the Packard panel. 
 B. Value of the Trust Res

 Plaintiffs seek removal of Corestates as trustee pursuant to 

20 Pa.C.S.A. § § 3173, 7121 which allow removal in the case of a 

breach of fiduciary duty. They submit that their request to 

enjoin Corestates from charging excessive fees in the future 

places the corpus of their trusts, each in excess of $50,000,2

into controversy. They distinguish our opinion in Packard since 

in that action injunctive relief against the future imposition of 

allegedly excessive fees was not sought. 

 In injunctive actions, it is settled that the amount in 

controversy is measured by the value of the right sought to be 

protected by the equitable relief. See Smith v. Adams, 130 U.S. 

167, 175, 9 S. Ct. 566, 569 (1889); Spock v. David, 469 F.2d 

1047, 1052 (3rd Cir. 1972) ("In cases where there is no adequate 

remedy at law, the measure of jurisdiction is the value of the 

right sought to be protected by injunctive relief."), rev'd on 

other grounds Greer v. Spock, 424 U.S. 828 (1976). In other 

words, "it is the value to plaintiff to conduct his business or 

personal affairs free from the activity sought to be enjoined 

that is the yardstick for measuring the amount in controversy." 

14A C. Wright et al. Federal Practice and Procedure, § 3708 at 

143-44 (2d ed. 1985) (citations omitted). 

 

2. Harrison's trust is valued at $902,844, Robin's at $98,741. 

App. at 50a. 
 The Supreme Court applied this principle in McNutt v. 

General Motors Acceptance Corp., 298 U.S. 178, 56 S. Ct. 780 

(1936), where the plaintiff sought to enjoin the enforcement of 

an allegedly unconstitutional regulation of its business. The 

Court held that the amount in controversy was not, as the 

plaintiffs contended, the entire value of the business, but 

instead the value of the right to be free of the particular 

regulation, which "may be measured by the loss, if any, which 

would follow the enforcement of the rules prescribed." Id. at 

181, 56 S. Ct. at 781. 

 While some support would appear to exist for plaintiffs' 

contention that the entire corpus of a trust is placed in 

controversy where a breach of fiduciary duty is alleged, see

Urbano v. Board of Managers of New Jersey State Prison, 415 F.2d 

247, 249 n.8 (3d Cir. 1969) ("Although we do not decide the 

issue, there is support for the proposition that where a breach 

of fiduciary duty is alleged, the corpus of the trust is the 

amount in controversy."), cert. denied 397 U.S. 948 (1970), it is 

the logic of McNutt that we find applicable to this case. In 

McNutt the Supreme Court made clear that the amount in 

controversy in an injunctive action is measured by the value to 

plaintiff to conduct his business or personal affairs free from 

the activity sought to be enjoined. The value to the plaintiffs 

in this action therefore is the cost to them of the continued 

imposition of the allegedly excessive sweep fees. The cost of 
these fees to date has not exceeded $2500. The plaintiffs are 

unable to set forth any calculation establishing that the 

continued imposition of such fees would bring a sum in excess of 

the jurisdictional amount into controversy. 

 In reserving the question of the measurement of the amount 

in controversy in the case of an allegation of a fiduciary 

breach, the Urbano panel was apparently concerned with an alleged 

fiduciary breach that could place the entire corpus of a trust in 

jeopardy. In Urbano, prison inmates alleged a fiduciary breach 

on the part of prison officials in the administration of trust 

funds on behalf of the inmates, asserting that the officials were 

using the trust money for their own benefit. Urbano 415 F.2d at 

249. Given these allegations, the prisoners apparently could 

have successfully alleged that the continued fiduciary breach on 

the part of prison officials placed the entire trust corpus into 

jeopardy. The Urbano panel never reached this question because 

it instead dismissed the case on the basis of abstention. 

Urbano, 415 F.2d at 250. In contrast, plaintiffs in the case at 

bar have failed to allege in any way a breach of fiduciary duty 

which threatens an amount of the trust corpus in excess of 

$50,000. Unlike Urbano, plaintiffs do not seek protection from 

any alleged conduct on the part of Corestates which threatens the 

entire trust corpus. Plaintiffs only seek protection from the 

continued imposition of sweep fees, which alone do not threaten 

an amount in excess of $50,000 per plaintiff. 
 In addition to contending that Corestates' future actions 

somehow threaten the entire trust corpus, the plaintiffs argue 

that title to the entire trust is in controversy by the mere 

equitable request for removal of the trustee. The plaintiffs 

contend that, because a trustee holds legal title to the trust 

corpus, a request for removal of a trustee is equivalent to a 

suit brought to determine title to property. We disagree. 

Corestates, while vested of legal title, does not claim ownership 

of the entrusted funds. See Restatement (Second) of Trusts § 2 

comment (d) (1959) ("The term 'title,' unlike 'ownership' is a 

colorless word; to say without more that a person has title to 

certain property does not indicate whether he holds such property 

for his own benefit or as trustee."). The cases cited by the 

plaintiffs all involve situations where the real equitable 

ownership of property was at stake, not mere legal title. See, 

e.g., Sanchez v. Taylor, 377 F.2d 733 (10th Cir. 1967) (holding 

that in a suit seeking a declaration of title the amount in 

controversy is governed by the value of the property). Since the 

equitable ownership of trust property is not at issue, we 

conclude that plaintiffs' injunctive request does not place the 

jurisdictional amount into controversy. 

 In sum we conclude that plaintiffs' requested injunctive 

relief does not, to a legal certainty, place an amount in excess 

of $50,000 into controversy. The mere request for removal of a 

trustee does not place the entire trust corpus into controversy; 
instead plaintiffs must seek by way of an injunction protection 

from an activity which threatens in excess of $50,000 of the 

trust corpus. Plaintiffs have failed to allege any such conduct 

on the part of Corestates. 

III. DOES AN IMPLIED RIGHT OF ACTION EXIST FOR 

VIOLATIONS OF REGULATIONS PROMULGATED 

PURSUANT TO 12 U.S.C. § 92a? 

 Section 92a provides that the "Comptroller of the Currency 

shall be authorized and empowered to grant by special permit to 

national banks applying therefor, when not in contravention of 

State or local law, the right to act as trustee. . . ." 12 

U.S.C. § 92a. Plaintiffs have pled violations of regulations 

promulgated pursuant to § 92a, namely 12 C.F.R. § 9.15 which 

allegedly requires a bank to charge a reasonable fee when 

sweeping, and 12 C.F.R. § 9.18(b)(12) which places limits on the 

amount a bank can charge to a collective investment fund. 

Plaintiffs contend that a cause of action exists for violations 

of § 92a and corresponding regulations by way of the private 

right of action which has been implied into 12 U.S.C. § 93(a) for 

violations of the National Bank Act. See Chesbrough v. Woodward, 

244 U.S. 72, 37 S. Ct. 579 (1916). Alternatively, plaintiffs 

maintain that a private right of action exists independently 

under § 92a. 

 We do not write on tabula rasa. The First and the Fifth 

Circuits have already written - and divided - on the question 
whether a private implied right of action exists for violations 

of § 92a and accompanying regulations. In B.C. Recreational 

Indus. v. First Nat'l Bank, 639 F.2d 828, 833 n.10 (1st Cir. 

1981), the First Circuit posited in dicta that an implied right 

of action could be found to exist through § 93 "for violations of 

the National Bank Act, including § 92a(a)." The B.C. Indus.

court failed to fully consider, however, whether § 92a was in 

fact enacted as part of the National Bank Act. In Blaney v. 

Florida Nat'l Bank, 357 F.2d 27 (5th Cir. 1966), the Fifth 

Circuit, in a more detailed analysis, concluded that a private 

right of action did not exist for violations of § 92a. The 

Blaney court failed to consider, however, the possibility that a 

private right of action could exist through § 93(a). As will be 

seen, the relationship of § 92a to § 93(a) and the National Bank 

Act is dispositive. 

 A. Can a Private Cause of Action Exist Through § 93(a) for 

a Violation of § 92a Regulations?

 The plaintiffs maintain that a cause of action exists for 

violations of § 92a and corresponding regulations by way of the 

private right of action which has been implied into § 93(a). See

Chesbrough v. Woodward, 244 U.S. at 78, 37 S. Ct. at 582 (finding 

an implied private cause of action under the predecessor to § 

93(a)). Section 93(a) provides in pertinent part that if "the 

directors of any national banking association shall knowingly 

violate or knowingly permit . . . [a] violat[ion] . . . [of] any 
of the provisions of title 62 of the Revised Statutes [the 

National Bank Act] . . . [such] director . . . shall be held 

liable. . . ." 12 U.S.C. § 93(a). 

 The implied right of action under § 93(a), first established 

by the Supreme Court in Chesbrough, has been recognized and 

applied to various provisions of the National Bank Act. See

Morast v. Lance, 807 F.2d 926, 932 (11th Cir. 1987); Durante 

Bros. & Sons, Inc. v. Flushing Nat'l Bank, 755 F.2d 239, 243 (2d 

Cir. 1985); Marx v. Centran Corp., 747 F.2d 1536, 1540 (6th Cir. 

1984), cert. denied 471 U.S. 1125 (1985); Harmsen v. Smith, 542 

F.2d 496, 499-500 (9th Cir. 1976), cert. denied 464 U.S. 822 

(1983). It should be noted, however, that the implied private 

right of action recognized in Chesbrough relates only to § 93(a), 

given that until 1978, Section 93 of the National Bank Act 

consisted only of the paragraph which is now § 93(a). Whether an 

implied right of action exists for an alleged violation of § 92a 

via the implied right of § 93(a) will depend upon whether § 92a 

was enacted as part of the National Bank Act.3 Section 92a was 

enacted on September 28, 1962 as Public Law 87-722 in order to 

transfer regulatory authority over the fiduciary operations of 

national banks from the Federal Reserve Board to the Comptroller 

 

3. If we were to determine that § 92a were part of the National 

Bank Act, it is unclear whether a private right of action could 

exist through § 93(a) for violations of regulations promulgated 

under § 92a. Since we determine that no private right of action 

exists for violations of § 92a, we need not address this 

question. 
of the Currency, repealing § 11(k) of the Federal Reserve Act 

(which was codified at 12 U.S.C. § 248). See Public Law 87-722, 

76 Stat. 668 (enacting § 92a while repealing § 11(k) of the 

Federal Reserve Act and explicitly amending two sections of the 

Internal Revenue Code). While designated by the editors of the 

U.S. Code as 12 U.S.C. § 92a, the enacting legislation and 

accompanying legislative history did not amend, repeal or even 

mention the National Bank Act. The fact that the legislation 

specifically amends two sections of the Internal Revenue Code, 

underscores the lack of Congressional intention that § 92a 

function as an amendment to the National Bank Act. 

 Moreover, later enactments refer to § 92a not as part of the 

National Bank Act, but as the Act of September 28, 1962. See Act 

of March 31, 1980, Pub L. 96-221, Title VII § 704, 94 Stat. 187 

(1980) (codified as 12 U.S.C. § 92(a)(k)); Garn-St. Germain 

Depository Institutions Act of 1982, Pub. L. 97-320, Title IV § 

424(g), 96 Stat. 1523 (1982) (codified as an amendment to 12 

U.S.C. § 93(b)) (referring to "the provisions of Title 62 of the 

Revised Statutes [the National Banking Act] or any of the 

provisions of section 92a of this title" (emphasis added)). For 

these reasons, we find that § 92a was not enacted as part of the 

National Bank Act, and hence we conclude that no private cause of 

action exists through § 93(a) for a violation of § 92a 

regulations. 
 B. No Implied Right of Action Exists under § 92a.

 Since § 92a was not enacted as part of the National Bank 

Act, a private right of action can only exist for violations of 

regulations promulgated under § 92a if a right of action can be 

implied under § 92a pursuant to the Supreme Court's four factor 

test of Cort v. Ash, 422 U.S. 66, 95 S. Ct. 2080 (1975). In 

deciding whether an implied right of action exists for a 

violation of regulations, we must first determine "whether the 

statute under which the rule was promulgated properly permits the 

implication of a private right of action . . . under Cort v. Ash

and its progeny." Angelastro v. Prudential-Bache Securities, 

Inc., 764 F.2d 939, 947 (3d Cir. 1985), cert. denied 474 U.S. 935 

(1985).4 Obviously, the regulations cannot themselves aid in 

answering the question whether a private right of action exists 

under the enabling statute. See Smith v. Dearborn Financial 

Services, Inc., 982 F.2d 976, 979 (6th Cir. 1993); Marshall v. 

Gibson's Products, Inc., 584 F.2d 668, 677-78 & n. 16 (5th Cir. 

1978) (holding that an implied private cause of action can be 

implied only from a statute and not from regulations, since the 

authority to create federal jurisdiction lies solely with 

Congress). 

 

4. In order to imply a private cause of action for a regulatory 

violation, we would also have to conclude both that (1) the 

regulation was properly within the scope of the enabling statute, 

and (2) the private right of action would further the purpose of 

the enabling statute. Angelastro, 764 F.2d at 947. 
 Under Cort v. Ash we are required to examine four factors in 

determining whether to imply a private right of action under a 

federal statute: (1) whether plaintiffs are part of the class for 

whose especial benefit the statute was enacted; (2) whether there 

was any indication of Congressional intent to deny or create a 

private remedy; (3) whether implication of a private remedy is 

consistent with the underlying purpose of the statute; and (4) 

whether the matter is traditionally one relegated to the states. 

Cort v. Ash, 422 U.S. at 78, 95 S. Ct. at 2088. Courts that 

have already considered the matter, have concluded that "it is 

doubtful that plaintiffs could meet the test of Cort v. Ash" in 

establishing an implied private right of action under § 92a. 

B.C. Indus., 639 F.2d at 833 n.10; Thompson v. Kerr, 555 F. Supp. 

1090, 1098 (S.D. Ohio 1982). 

 Supreme Court precedent has established that the second Cort 

v. Ash factor, legislative intent, is entitled to the greatest 

weight in the calculus. Touche Ross & Co. v. Redington, 442 U.S. 

560, 575, 99 S. Ct. 2479, 2489 (1979). Specifically, a lack of 

evidence of legislative intent to create a private right of 

action, either express of by implication, can by itself provide 

the answer that a private right of action should not be implied. 

See Touche, 442 U.S. at 571-76, 99 S. Ct. at 2486-89 ("[I]mplying 

a private right of action on the basis of congressional silence 

is a hazardous enterprise, at best."). 
 The legislative history accompanying § 92a and its 

predecessor is void of any indication that Congress intended to 

create a private remedy. No court had ever recognized a private 

right of action under the predecessor statute to § 92a,5 and in 

enacting § 92a, Congress explicitly stated that "[n]o change 

would be made from the substantive provisions of section 11(k) 

[the predecessor statute of the Federal Reserve Act] other than 

the transfer of authority, so that there is no alteration of 

existing law regarding national banks acting in fiduciary 

capacities." 87th Congress, 2d Sess., S Rep. No. 2039, 1962 U.S. 

Code Cong. & Ad. Rep. 2735; see also Investment Co. Institute v. 

Camp, 401 U.S. 617, 621-22, 91 S. Ct. 1091, 1094 (1971) ("In 1962 

Congress transferred jurisdiction over most of the trust 

activities of national banks from the Board of Governors of the 

Federal Reserve System to the Comptroller of the Currency, 

without modifying any provision of substantive law."). Given 

that no private cause of action existed under § 92a's predecessor 

and Congress expressly intended not to change the substantive 

law, we conclude that Congress did not intend to create a private 

cause of action when it enacted § 92a. 

 An evaluation of the remaining three Cort v. Ash factors 

also leads us to decline to recognize a private right of action. 

 

5. The predecessor statute, 12 U.S.C. § 248 (formerly § 11(k)) 

vested the authority to regulate the fiduciary operations of 

national banks with the Federal Reserve System's Board of 

Governors. 
First, no indication exists that plaintiffs are part of a class 

for whose especial benefit the statute was enacted. Congress 

enacted the predecessor to § 92a merely to place national banks 

on equal footing with state banks in the performance of trust 

functions. Blaney, 357 F.2d at 30 ("This is obvious from the 

most cursory reading of . . . 12 U.S.C. § 92a."). Given this 

purpose, it appears that the statute was not enacted for the 

benefit of any particular identified class, other than arguably 

national banks. 

 Under the third Cort v. Ash factor we ask whether the 

implication of a private remedy is consistent with the underlying 

purpose of the statute -- to place national banks on equal 

footing with state banks in the performance of trust functions. 

In the enacting legislation (in what is now § 92a(k)), Congress 

created a detailed remedial provision. This section provides 

that in the event the Comptroller determines that a national bank 

unlawfully exercised the granted fiduciary powers, the 

Comptroller should, following specified procedures (i.e. by 

providing notice and a hearing), revoke the trust powers granted 

by statute. 12 U.S.C. § 92a(k)(1). If the bank's fiduciary 

powers were revoked subject to these procedures, the bank could 

then obtain direct judicial review by a federal appellate court. 

12 U.S.C. § 92a(k)(2); 12 U.S.C. § 1818(h). We find that this 

carefully reticulated enforcement mechanism would not be enhanced 

by the implication of a private right of action. More 
specifically, the Congressional grant of enforcement power to the 

Comptroller, head of the federal agency created and empowered by 

Congress to develop and exercise expertise in this area,6 would 

not be furthered by allowing a court, as opposed to the 

Comptroller, to make the initial determination whether a bank had 

engaged in conduct inconsistent with the statute. 

 Under the fourth and final Cort factor we must ask whether 

the matter is one traditionally relegated to the states. One is 

hard pressed to imagine an area of law more traditionally a 

province of state law, than the law of trust and estates. 

Implying a private right of action under § 92a could effectively 

federalize a not insignificant portion of state trust and estate 

law, and burden federal courts with numerous cases involving 

disputes between trust beneficaries and national banks, a most 

untoward result. We do not believe that Congress could have 

intended such a result by its enactment of § 92a.7 

 

6. See Central Nat'l Bank v. United States Dept. of Treasury, 

912 F.2d 897, 905 (7th Cir. 1990) ("[B]anks are his [the 

Comptroller's] wards, and his only wards."). 

7. Because we find that no private right of action exists for 

violations of § 92a, we need not address the validity of 

Corestate's claim that, in the area of trusts and estates, the 

federal court should abstain out of deference to the state 

Orphans Court's expertise. See Ryan v. First Pennsylvania 

Banking & Trust Co., 519 F.2d 572, 575 (3d Cir. 1975); Reichman 

v. Pittsburgh Nat'l Bank, 465 F.2d 16, 18 (3d Cir. 1972). 

However like the Fifth Circuit in Blaney, our decision is 

reinforced by the understanding that the law of trusts and 

estates is a primary matter of state concern. Blaney, 357 F.2d 

at 30. 
 In sum, all four Cort v. Ash factors militate against the 

plaintiffs' position. Accordingly, we conclude that no private 

right of action should be implied under § 92a. 

 IV. CONCLUSION

 We will affirm the district court's order granting 

Corestate's motion to dismiss for failure to state a claim as to 

purported federal claims and for lack of subject matter 

jurisdiction as to all remaining claims. Additionally, the 

district court's order denying plaintiffs motion to enjoin 

commencement of trust accountings in Pennsylvania Orphans' Court, 

which the plaintiffs have also appealed, will likewise be 

affirmed. 

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