Source: http://openjurist.org/652/f2d/685
Timestamp: 2013-05-18 12:24:23
Document Index: 708761929

Matched Legal Cases: ['§ 181', '§ 1828', '§ 221', '§ 36', '§ 36', '§ 221', '§ 221', '§ 702', '§ 1828', '§ 1828', '§ 1828', '§ 221', '§ 36', '§ 221', '§ 221', '§ 221', '§ 221', '§ 221', '§ 221', '§ 36', '§ 36', '§ 36', '§ 221', '§ 221', '§ 221', '§ 221', '§ 221', '§ 221', '§ 221', '§ 221', '§ 221', '§ 221', '§ 221', '§ 221', '§ 221', '§ 221', '§ 221', '§ 1842', '§ 1842', '§ 1842', '§ 1842', '§ 1842', '§ 1848', '§ 1828', '§ 1828', '§ 1828', '§ 221', '§ 221', '§ 221', '§ 36', '§ 221', '§ 221', '§ 221', '§ 221', '§ 294', '§ 221', '§ 1842', '§ 1848']

652 F2d 685 Marshall Ilsley Corporation v. G Heimann | OpenJurist
652 F. 2d 685 - Marshall Ilsley Corporation v. G Heimann	Home652 f2d 685 marshall ilsley corporation v. g heimann
652 F2d 685 Marshall Ilsley Corporation v. G Heimann 652 F.2d 685
MARSHALL & ILSLEY CORPORATION, et al., Plaintiffs-Appellants,v.John G. HEIMANN, Comptroller of the Currency of the UnitedStates, et al., Defendants-Appellees.
Argued April 9, 1981.Decided June 12, 1981.As Corrected June 19, 1981.
Because the Comptroller regarded Midland's situation as an emergency, the Comptroller, pursuant to 12 U.S.C. § 181,3 waived the requirement of shareholder approval and waived certain other requirements of bank mergers, pursuant to the Bank Merger Act, 12 U.S.C. § 1828(c).4 The Comptroller also determined that the retention of Midland's existing office as a branch of First Bank was consistent with Wisconsin's emergency branch banking statute, Wis.Stat. § 221.04(1)(j)2, which is made applicable to national banks by 12 U.S.C. § 36(c).5
We deal first with plaintiffs' standing to assert the branch banking issues raised in plaintiffs' amended complaint.6 Plaintiffs' amended complaint sets forth two alternative theories of how the Comptroller violated federal and state branch banking statutes: Count I alleges that allowing First Bank to acquire the former Midland facility as a branch violated 12 U.S.C. § 36 and the Wisconsin emergency branch banking statute, Wis.Stat. § 221.04(1)(j)2, because there was no "emergency" at the time the Comptroller acted; Count II alleges that, even if there was an emergency, the Comptroller violated Wis.Stat. § 221.04(1)(j)2 by failing to first offer plaintiffs the opportunity to acquire Midland.
As Justice Douglas stated in Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 151, 90 S.Ct. 827, 829, 25 L.Ed.2d 184 (1970), "(g)eneralizations about standing to sue are largely worthless as such." One commentator has noted that the concept of standing is "among the most amorphous in the entire domain of public law." Hearings on S.2097 before the Subcommittee on Constitutional Rights of the Senate Judiciary Committee, 89th Cong., 2d Sess. 465, 498 (1966) (statement of Prof. Paul A. Freund), quoted in Flast v. Cohen, 392 U.S. 83, 99, 88 S.Ct. 1942, 1952, 20 L.Ed.2d 947 (1968). In order to avoid confusion and inconsistency in analyzing standing questions, it is necessary to focus on the precise parties, injuries, interests, and statutes involved. Therefore, we must narrow our focus to the specific issue of standing of competitors to challenge agency action which results in allegedly illegal competition.
The general test for standing was first articulated by the Supreme Court in three cases involving competitors' challenges to Comptroller rulings allowing national banks to enter the competitors' fields. Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970) (data processing); Arnold Tours v. Camp, 400 U.S. 45, 91 S.Ct. 158, 27 L.Ed.2d 179 (1970) (travel services); Investment Company Institute v. Camp, 401 U.S. 617, 91 S.Ct. 1091, 28 L.Ed.2d 367 (1971) (mutual investment funds). The test enunciated in these cases gives meaning to the Administrative Procedure Act's grant of standing to persons "aggrieved by agency action within the meaning of a relevant statute...." 5 U.S.C. § 702.
The test has two prongs. The first part of the test requires that "the plaintiff alleges that the challenged action has caused him injury in fact, economic or otherwise." Data Processing, 397 U.S. at 152, 90 S.Ct. at 829. The second part of the test requires that "the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question." 397 U.S. at 153, 90 S.Ct. at 829.
* We now consider the first requirement of standing, that there be an "injury in fact." This requirement assures satisfaction of the constitutional requirement of a "case or controversy." See Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26, 37-38, 96 S.Ct. 1917, 1923-24, 48 L.Ed.2d 450 (1976). Plaintiffs' original complaint was dismissed because it did not include any allegations of injury in fact, economic or otherwise. The court refused to construe the complaint as alleging the adverse effect necessary to give plaintiffs standing and, consequently, dismissed with leave to amend.7
In their amended complaint, plaintiffs allege that plaintiff banks and Midland were within a radius of one-half mile of each other and competed actively. Plaintiffs allege damages resulting from "illegally acquired changes in the competitive environment" caused by First Bank's acquisition of Midland.8 The district court held that, although plaintiffs alleged that they and the new First Bank branch at the former Midland location were competitors, "plaintiffs' amended complaint still contains no allegation of any concrete or identifiable injury, whether economic or otherwise, caused them by the defendants' acts unless competition itself is somehow considered injurious." Marshall & Ilsley Corp. v. Heimann, No. 78-C-42, slip op. at 4 (W.D.Wis. June 30, 1980).
The Supreme Court has held, however, that an administrative agency's authorization of an allegedly illegal competitor or form of competition does constitute injury to competitors for standing purposes. In Data Processing, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970), Arnold Tours, 400 U.S. 45, 91 S.Ct. 158, 27 L.Ed.2d 179 (1970), and Investment Company Institute, 401 U.S. 617, 91 S.Ct. 1091, 28 L.Ed.2d 367 (1971), the Comptroller gave national banks permission to enter new areas of operation. "Injury in fact" flowed from the economic harm caused by an additional competitor. In Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972), the Court reaffirmed the Data Processing holding that harm to competitive position comprises "injury in fact":
405 U.S. at 733-34, 92 S.Ct. at 1364-65 (footnote omitted).
Defendants argue that Data Processing and other cases challenging decisions by the Comptroller are distinguishable because, in those cases, competitive injury was readily inferred as a result of the Comptroller's authorization of new branches or new forms of competition.9 Here, plaintiffs challenge the change of ownership of an existing bank. According to the district court, where there is "replacement" rather than "new" competition, competitive injury cannot be "assumed from the situation itself or inferred from plaintiffs' allegations." Marshall & Ilsley Corp. v. Heimann, No. 78-C-42, slip op. at 11 (W.D.Wis. Sept. 18, 1978). But, while the establishment of a new branch bank where there was no bank is certainly a more obvious form of competitive harm than the transformation of an existing bank into a branch bank, we do not find the differences between "new" and "replacement" competition decisive.
According to the cases involving "new" competition, if First Bank had attempted to establish a new branch in Milwaukee, plaintiffs would have standing to challenge the legality of that new branch; competitive injury would be assumed to flow from a new source of competition.10 In this case, there can be no doubt that conversion of Wisconsin's fourth largest bank into a branch of a bank located in a different city and owned by an enormous bank holding company represents a change in the competitive configuration of Milwaukee's banking community. To hold that plaintiffs would satisfy the "injury in fact" requirement for purposes of challenging a totally new branch, no matter how small, but that plaintiffs must allege more specific and identifiable harm when the allegedly illegal branch is an acquired bank, would be absurd. We find that the allegations of competitive harm in plaintiffs' amended complaint are sufficient to satisfy the "injury in fact" prerequisite to standing. Cf. Leuthold v. Camp, 273 F.Supp. 695 (D.Mont.1967), aff'd, 405 F.2d 499 (9th Cir. 1969) (competitor challenge allowed although Comptroller's action did not increase the number of competitive banking facilities).
This circuit consistently has required satisfaction of the zone of interests test for standing. Bradford School Bus Transit, Inc. v. Chicago Transit Authority, 537 F.2d 943, 946 (7th Cir. 1976), cert. denied, 429 U.S. 1066, 97 S.Ct. 797, 50 L.Ed.2d 784 (1977); Apter v. Richardson, 510 F.2d 351, 353 (7th Cir. 1975). Although the Supreme Court has not elaborated on the zone of interests standard recently, the standard is still referred to by the Supreme Court as an element of the test for standing.12 We further are persuaded of the standard's continuing vitality by the thoughtful and detailed discussion in Control Data Corp. v. Baldridge, No. 80-1143, slip op. at 13-17 (D.C.Cir. March 25, 1981). See also Tax Analysts & Advocates v. Blumenthal, 566 F.2d 130, 138-43 (D.C.Cir. 1977), cert. denied, 434 U.S. 1086, 98 S.Ct. 1280, 55 L.Ed.2d 791 (1978). Therefore, although we find, contrary to the district court, that plaintiffs have alleged a personal stake and interest in the litigation which amounts to an "injury in fact," the standing issue is by no means decided. We must also decide whether the particular interest asserted by plaintiffs is arguably protected by the particular statutory provision involved. See Tax Analysts, 566 F.2d at 140.
The other federal statutory provision involving the Comptroller's determination of an emergency is 12 U.S.C. § 1828(c). This portion of the Bank Merger Act concerns the antitrust implications of bank mergers. It establishes procedures "for the review of proposed bank mergers so as to eliminate the necessity for the dissolution of merged banks." H.Rep.No.1221, 89th Cong., 2d Sess. 1, reprinted in 1966 U.S.Code Cong. & Ad.News 1860. These procedures may be expedited when the responsible agency finds "that it must act immediately in order to prevent the probable failure of one of the banks involved." 12 U.S.C. § 1828(c)(3), (4), (6).
In Control Data Corp. v. Baldridge, No. 80-1143, slip op. at 24-27 (D.C.Cir. March 25, 1981), the court held that plaintiffs are not within the zone of interests of a statute where their competitive interest does not match the particular interest in competition protected by that statute. Here, plaintiffs' general interest in competition does not match the antitrust interest of the statute. Therefore, we find that plaintiffs do not have standing to challenge the Comptroller's determination of an emergency under 12 U.S.C. § 1828(c).
Finally, we reach the question of whether plaintiffs' challenge to the Comptroller's determination of an emergency is within the zone of interests protected by the Wisconsin emergency branch banking statute, Wis.Stat. § 221.04(1)(j)2. Wisconsin branch banking law is relevant to the Midland transaction because, according to federal banking laws, the Comptroller may not approve a branch of a national bank unless state law prerequisites to branching are satisfied. 12 U.S.C. § 36(c).
In Wisconsin, branch banking is forbidden, except as provided by statute. Wis.Stat. § 221.04(1)(f). One statutory provision allows branch banking in a "bankless community." Wis.Stat. § 221.04(1)(j)1. This statute allows a bank to establish a branch in a municipality that has no bank or branch bank only if there is no bank or branch bank within three miles of the proposed branch and if the home bank is in the same county as the branch, or is in a contiguous county and within 25 miles of the branch.16 Wis.Stat. § 221.04(1)(j)2 provides an exception to § 221.04(1)(j)1 in emergencies.
It is important to distinguish the zone of interests protected by the emergency branch banking statute, § 221.04(1)(j)2, from the zone of interests protected by the ordinary branch banking restrictions, § 221.04(1)(f), (i), (j) 1, and (1). Although plaintiffs do fall within the zone of interests of the ordinary, non-emergency branch banking provisions, we find that plaintiffs do not fall within the zone of interests protected by the Wisconsin emergency branch banking statute.
Competitors of a proposed branch generally are considered to be within the zone of interests of state laws restricting branch banking, which are made applicable to national banks by 12 U.S.C. § 36(c). The purpose of 12 U.S.C. § 36(c) is to place national and state banks on a basis of "competitive equality" with respect to branch banking. First Nat'l Bank of Logan v. Walker Bank & Trust Co., 385 U.S. 252, 261, 87 S.Ct. 492, 497, 17 L.Ed.2d 343 (1966). Thus, both state and national banks that would compete with a proposed branch of a national bank are protected by 12 U.S.C. § 36(c) from illegally authorized competition.17 In fact, in many cases where the Comptroller's approval of an allegedly illegal branch is challenged by a competitor, standing is simply assumed. See, e. g., State Bank of Rensselaer v. Heimann, 619 F.2d 679 (7th Cir. 1980); First Union Bank & Trust Co. of Winamac v. Heimann, 600 F.2d 91 (7th Cir.), cert. denied, 444 U.S. 950, 100 S.Ct. 493, 62 L.Ed.2d 320 (1979); First Nat'l Bank of Crown Point v. Camp, 463 F.2d 595 (7th Cir. 1972); Marion Nat'l Bank v. Van Buren Bank, 418 F.2d 121, 123 (7th Cir. 1969).18
In addition to evincing an intent to protect depositors of a failing bank, § 221.04(1)(j)2 provides that when an emergency requires lifting the general prohibitions against branch banking, banks within the geographical limits of § 221.04(1)(j)1 must be offered the opportunity to merge or consolidate with the failing bank. Consequently, we must examine § 221.04(1)(j)1 to determine: (1) the meaning of the "geographical limits" referred to in § 221.04(1)(j)2 and (2) whether plaintiffs fit within those geographical limits.
What is meant by the geographical limits of § 221.04(1)(j)1 is not entirely clear from the face of § 221.04(1)(j)1. But we interpret20 the phrase "banks within the geographical limits" to encompass those banks that meet all the limitations of § 221.04(1)(j)1 and, therefore, could have acquired the failing bank as a branch, pursuant to § 221.04(1)(j)1, even without an emergency. This interpretation thus entails geographical limitations on the failing bank, as well as on the acquiring bank. In other words, for the "offer" requirement to apply, the failing bank must be the only bank or branch bank in its municipality; there must be no bank or branch bank within three miles of the failing bank; and the acquiring bank must be either in the same county or in a contiguous county and within 25 miles of the failing bank. Only the banks within those geographical limits are entitled to an offer pursuant to § 221.04(1)(j)2.
The "offer" provision is an attempt to minimize the exceptions to the general rule on branching. The "offer" provision evinces an intent to have, whenever possible, even in an emergency, a branch bank/home bank relation that would be otherwise allowable under § 221.04(1)(j)1. We find that only a bank which meets the geographical requirements and which, therefore, could have operated the failing bank as a branch bank, comes within the zone of interests protected by the emergency branch banking statute's "offer" provision. Thus, only a bank which is entitled to an offer under the statute has standing to challenge the determination of an emergency.
The former Midland facility and plaintiffs' banks are all in Milwaukee and are within a one mile radius of each other. Thus, none of the plaintiffs could have qualified under § 221.04(1)(j)1 to acquire Midland as a branch. Since plaintiffs are not within the geographical limits of § 221.04(1)(j)1, they do not have standing to challenge the Comptroller's determination that Midland's condition warranted waiver of the usual geographical restrictions on branch banking. Consequently, even though plaintiffs are within the zone of interests of the ordinary branch banking statute, they are not within the zone of interests protected by Wisconsin's emergency branch banking statute.
Stewart, Reformation of Administrative Law, 88 Harv.L.Rev. 1667, 1736 (1975). Thus, we conclude that the risk of an erroneous determination of an emergency, and subsequent approval of an illegal branch, does not justify allowing competing banks to disrupt the mechanisms for dealing with failing banks.
In Count II of their amended complaint, plaintiffs allege that even if an emergency existed at Midland, the Comptroller violated § 221.04(1)(j)2 by failing to offer to plaintiffs the opportunity to acquire Midland. But, as just discussed, plaintiffs are not within the geographical limitations of § 221.04(1)(j)1. Only those banks within the geographical limits of § 221.04(1) (j)1 are entitled to be offered the opportunity to purchase the failing bank and, consequently, have standing to contest the Comptroller's failure to offer them that opportunity. Therefore, plaintiffs lack standing to contest the failure to give them an offer.
In order to purchase a bank, a bank holding company must obtain Board approval. 12 U.S.C. § 1842(a). Pursuant to 12 U.S.C. § 1842(d)(1), the Board may approve a bank holding company's purchase of assets of a bank outside the state in which total deposits of the bank holding company's banking subsidiaries are largest only if acquisition of such assets of a bank by an out-of-state bank holding company is specifically authorized by the statute laws of the state in which the bank is located.21 Plaintiffs argue that since (1) Minnesota is the state where the total deposits of First Bank System's banking subsidiaries are greatest and (2) Wisconsin statutes do not permit the acquisition of banks located in Wisconsin by bank holding companies outside of Wisconsin, First Bank System could not acquire Midland directly. Thus, the purported acquisition of Midland by First Bank was, plaintiffs argue, a sham perpetrated by First Bank System in order to evade the prohibitions of 12 U.S.C. § 1842(d).22
Initially, we note that the restrictions in § 1842(d) do not, on their face, apply here. Pursuant to 12 U.S.C. § 1842(a)(4), prior Board approval is only necessary "for any bank holding company or subsidiary thereof, other than a bank, to acquire all or substantially all of the assets of a bank" (emphasis added).23 Since the transaction at issue was a purchase of the assets of a bank (Midland) by another bank (First Bank), not by a bank holding company, under the literal language of the statute, no application for approval from the Board was required. See Leuthold v. Camp, 273 F.Supp. 695, 702 (D.Mont.1967), aff'd, 405 F.2d 499 (9th Cir. 1969); South Dakota v. Nat'l Bank of South Dakota, 335 F.2d 444, 448-49 (8th Cir. 1964), cert. denied, 379 U.S. 970, 85 S.Ct. 667, 13 L.Ed.2d 562 (1965) ("The words in the statute 'other than a bank' clearly show the intention of Congress not to require a bank acquiring the assets of another bank to obtain Board approval").
The leading case in this confusing area of allocation of authority between the Comptroller and the Board, with review in the district court or court of appeals respectively, is Whitney Nat'l Bank v. Bank of New Orleans, 379 U.S. 411, 85 S.Ct. 551, 13 L.Ed.2d 386 (1965). In Whitney, a national bank in Louisiana wished to expand its operations through a new bank, but state branch banking law prohibited operation of a branch beyond its home parish. The bank attempted to solve its problem by organizing a bank holding company. The existing bank was to be merged into the holding company, which, in turn, would organize two banks, one consisting of the existing bank and the other consisting of the new bank in the neighboring parish. The net result was that the stockholders of the original bank would own the holding company, which in turn would own and operate both the original and new banks. The Board approved the plan over the objection of competing banks. The competitors sought judicial review of the Board's decision in the Fifth Circuit Court of Appeals, pursuant to 12 U.S.C. § 1848.
379 U.S. at 421, 85 S.Ct. at 558 (emphasis added).
Thus, if there really was a BHCA issue in this case, it could only be brought before the Board, not as a challenge to the Comptroller's authority to approve the transaction. To hold otherwise would allow a decision regarding the Comptroller's authority to force a particular interpretation of the BHCA on the Board without the issue being presented in the first instance to the Board.27IV
The Bank Merger Act, 12 U.S.C. § 1828(c), which deals with determination of the antitrust aspects of bank mergers, requires the Comptroller to follow certain procedures, including notice to and solicitation of reports from other agencies and the Attorney General, before allowing a national bank to acquire the assets and assume the liabilities of another national bank. The Bank Merger Act allows waiver of these requirements if the Comptroller "finds that it must act immediately in order to prevent the probable failure of one of the banks involved...." 12 U.S.C. § 1828(c)(3), (4), (6). In particular, 12 U.S.C. § 1828(c)(6) provides that in an emergency, the transaction may be consummated immediately upon approval by the Comptroller
The two branch banking claims in plaintiffs' amended complaint were contained in Count I of plaintiffs' original complaint. Count I of the original complaint was dismissed for lack of standing because plaintiffs failed to adequately allege injury in fact flowing from First Bank's acquisition of Midland, the operation of the former Midland facility as a branch bank, and the failure to provide plaintiffs with an opportunity to acquire Midland's operations. See United States v. SCRAP, 412 U.S. 669, 93 S.Ct. 2405, 37 L.Ed.2d 254 (1973); Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972)
Plaintiffs subsequently amended their complaint to include allegations of: (1) competitive injury from the allegedly illegal First Bank branch, and (2) injury from the failure to offer Midland to plaintiffs, since one or more of them might have acquired Midland if they had been given a fair opportunity to do so. The district court found, however, that competitor status, in the absence of "injury in fact," was insufficient to confer standing to challenge the Comptroller's decision. The district court also found that the offer requirement of Wis.Stat. § 221.04(1)(j)2 was not binding on the Comptroller, so plaintiffs had no cognizable claim against the Comptroller under that statute.
Marshall & Ilsley Corp. v. Heimann, No. 78-C-42, slip op. at 12 (W.D.Wis. Sept. 18, 1978).
See, e. g., State Bank of Fargo v. Merchants Nat'l Bank & Trust Co. of Fargo, 451 F.Supp. 775, 784 (D.N.D.1978), aff'd, 593 F.2d 341 (8th Cir. 1979) (establishment of two new customer electronic funds transfer centers); Marion Nat'l Bank of Marion v. Van Buren Bank, 418 F.2d 121, 123 (7th Cir. 1969) (opening of new banking facility)
Many opinions involving competitors' challenges to the establishment of allegedly illegal branches do not even discuss the standing issue. Recognition of competitive injury is implicit. See State Bank of Rensselaer v. Heimann, 619 F.2d 679 (7th Cir. 1980); First Union Bank & Tr. Co. of Winamac v. Heimann, 600 F.2d 91 (7th Cir.), cert. denied, 444 U.S. 950, 100 S.Ct. 423, 62 L.Ed.2d 320 (1979)
The district court went on to hold that plaintiffs had failed to allege an "injury in fact." Thus, even if the district court had acknowledged that the zone of interests test is still viable, it did not have to reach that issue. See Sierra Club v. Morton, 405 U.S. at 733 n.5, 92 S.Ct. at 1365 n.5
See cases cited in Control Data Corp. v. Baldridge, No. 80-1143, slip op. at 16 n.12 (D.C.Cir. March 25, 1981)
Wisconsin branch banking law prohibits establishment of branch banks except as provided by Wis.Stat. §§ 221.04(1)(i), (j), and (l). Wis.Stat. § 221.04(1)(f). If, as plaintiffs allege, there was no emergency, the Wisconsin branch banking laws and 12 U.S.C. § 36 clearly were violated, since only the emergency exception, Wis.Stat. § 221.04(1)(j)2, could possibly apply to permit First Bank's acquisition of Midland
S.Rep. No. 730, 86th Cong., 1st Sess. 4-5, reprinted in 1959, U.S.Code Cong. & Ad.News 2232 at 2236. See also Minichello v. Saxon, 337 F.2d 75, 82 (3d Cir. 1964), cert. denied, 380 U.S. 952, 85 S.Ct. 1084, 13 L.Ed.2d 969 (1965) and, on remand, 266 F.Supp. 279 (M.D.Pa.1967), aff'd 394 F.2d 715 (3d Cir.), cert. denied, 393 U.S. 849, 89 S.Ct. 137, 21 L.Ed.2d 120 (1968) ("The 1959 statute resulted from a belief on the part of Congress that shareholders to that time had not had effective control over the execution of bulk sale agreements made in contemplation of liquidation").
Wis.Stat. § 221.04(1)(j)1 provides that a bank has the power:
418 F.2d at 123. Other circuits and district courts which have explicitly considered the issue have found standing for competitors. See, e. g., National State Bank of Elizabeth v. Smith, 591 F.2d 223, 228 (3d Cir. 1979); First Nat'l Bank of Smithfield v. Saxon, 352 F.2d 267, 272 (4th Cir. 1965), aff'd, 385 U.S. 252, 87 S.Ct. 492, 17 L.Ed.2d 343 (1966); Mid-West Nat'l Bank of Lake Forest v. Comptroller, 296 F.Supp. 1223, 1226 (N.D.Ill.1968).
In First Nat'l Bank of Wisconsin Rapids v. M & I Peoples Bank of Coloma, 95 Wis.2d 303, 290 N.W.2d 321 (1980), the Wisconsin Supreme Court discussed the zone of interests of the "bankless community" exception to the prohibition against branch banking, § 221.04(1)(j)1. In Coloma, a competing bank challenged the approval of an application to establish a branch bank. Plaintiff claimed that the branch bank would be more than 25 miles from the home bank, in violation of § 221.04(1)(j)1. The court held that plaintiff had alleged sufficient injury, but held, without any discussion of the statutory scheme or legislative history, that "the requirement of sec. 221.04(1)(j)1, Stats., that a branch be no more than 25 miles from the home bank (if in a contiguous county), does not evince an intent to protect competitors." 290 N.W.2d at 327. The significance of the court's conclusion is questionable, since the court proceeded with an extensive analysis of plaintiff's standing pursuant to Wisconsin's quo warranto statute, Wis.Stat. § 294.04(2). The court held that the quo warranto statute explicitly granted competitor standing. Therefore, plaintiff had standing to bring the quo warranto action even in the absence of a statutory purpose to protect against competitive injury. In a footnote, the court acknowledged that its conclusion regarding standing to protect a competitive interest was contrary to many federal decisions, but declined to clarify the issue because standing clearly was proper under the quo warranto statute. 290 N.W.2d at 327 n.6
We find that the Coloma decision does not resolve the question of the zone of interests of the emergency branch banking statute. The bare statement in Coloma that the 25 mile limit does not evince an intent to protect competitors does not aid interpretation of other parts of the Wisconsin branch banking statutes. Therefore, we do not rely on Coloma in our discussion of the zone of interests protected by Wisconsin's emergency branch banking statute, § 221.04(1)(j)2.
Although "the federal statute has incorporated by reference the limitations which state law places on branch banking activities by state banks," First National Bank in Plant City v. Dickinson, 396 U.S. 122, 131, 90 S.Ct. 337, 342, 24 L.Ed.2d 312 (1969), the interpretation of those incorporated statutes is a matter of federal law. First National Bank of Fairbanks v. Camp, 465 F.2d 586 (D.C.Cir.1972), cert. denied, 409 U.S. 1124, 93 S.Ct. 936, 35 L.Ed.2d 255 (1973)
12 U.S.C. § 1842(d)(1) provides:
Section 1842(a)(4) constitutes an allocation of agency responsibility between the Comptroller and the Board. Acquisition of a bank by a bank subsidiary of a bank holding company must be approved by the Comptroller under the Bank Merger Act, while acquisition of a bank directly by a bank holding company must be approved by the Board under the Bank Holding Company Act
Although the transition (sic) had the effect of expanding the banking assets of First Bank System, section 3(a)(4) of the Bank Holding Company Act permits a bank subsidiary of a bank holding company to acquire substantially all of the assets of another bank without Board approval under the Bank Holding Company Act. In this case the Comptroller of the Currency approved the transaction after considering essentially the same factors that would have been considered by the Board of Governors, had the transaction required an application under section 3 of the Act.
In Whitney, as here, both branch banking and BHCA issues were raised. Plaintiffs' chief contention was that the organization of the bank holding company was unlawful because it allowed the formation of the new bank as a virtual branch of the old bank, contrary to state law. Plaintiffs also argued that state law prohibited subsidiaries of bank holding companies from opening. The Court noted that, with respect to both arguments, plaintiffs' "quarrel is in actuality not merely with the opening of the bank, but rather with its opening as a subsidiary of (the bank holding company)." 379 U.S. at 418, 85 S.Ct. at 556
The Court also stayed the issuance of its judgment for 60 days in order to allow the parties to return to the Fifth Circuit, which had reviewed the Board's order pursuant to 12 U.S.C. § 1848, to secure a remand to the Board for further consideration of plaintiffs' claims. 379 U.S. at 425, 85 S.Ct. at 560
We also note that even if some relief by way of a stay by the court was possible, plaintiffs have not raised a sufficiently substantial BHCA issue to warrant such "extraordinary use of court process." American Bank of Tulsa, 503 F.2d at 789. Plaintiffs' allegation of a BHCA violation is exactly like that rejected in Leuthold v. Camp, 273 F.Supp. at 702 (D.Mont.1967), aff'd, 405 F.2d 499 (9th Cir. 1969), that "because what is done in terms of real ownership is so like what is prohibited, that what is done likewise should be prohibited." It is true that defendants First Bank and First Bank System took advantage of a "loophole" in the Bank Holding Company Act. But taking advantage of the loophole is not, by itself, enough to justify piercing the corporate veil. As stated by the court in Leuthold v. Camp, 273 F.Supp. at 702:
See also South Dakota v. Nat'l Bank of South Dakota, 335 F.2d at 448-49 (8th Cir. 1964), cert. denied, 379 U.S. 970, 85 S.Ct. 667, 13 L.Ed.2d 562 (1965).
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