Source: https://openjurist.org/559/f2d/950/bt-investment-managers-inc-v-a-lewis
Timestamp: 2017-08-23 06:28:44
Document Index: 450049325

Matched Legal Cases: ['§ 1843', '§ 225', '§ 1846', '§ 2281', '§ 7', '§ 9']

559 F2d 950 Bt Investment Managers Inc v. A Lewis | OpenJurist
559 F. 2d 950 - Bt Investment Managers Inc v. A Lewis
559 F2d 950 Bt Investment Managers Inc v. A Lewis
559 F.2d 950
BT INVESTMENT MANAGERS, INC. and Bankers Trust New York
Gerald A. LEWIS, Comptroller of the State of Florida and
Commissioner of Banking of the State of Florida,
No. 76-1373.
The sole issue on appeal is whether the district court properly abstained in this case. Although the abstention doctrine is more properly referred to as a collection of doctrines,10 the particular doctrine first articulated in Railroad Commission of Texas v. Pullman, 312 U.S. 496, 61 S.Ct. 634, 85 L.Ed. 971 (1941), teaches that in certain federal constitutional challenges to state statutes a federal district court should exercise its discretion to stay its action pending interpretation of the challenged statute by the courts of the enacting state and thereby avoid an unnecessary federal constitutional decision. The doctrine is conceived to enhance comity within our federal system of government: by leaving to a state the interpretation of unsettled questions of that state's laws when such interpretation may dispose of a case short of federal constitutional scrutiny, unnecessary friction between state and national governments may be avoided.
However, Pullman -type abstention is a narrow, judicially created exception to the general grant of federal jurisdiction found in article III of the Constitution.11 Not only is there a presumption in favor of retention of federal jurisdiction once obtained,12 it is also well established that the doctrine "contemplates that deference to state court adjudication only be made where the issue of state law is uncertain." Harman v. Forssenius, 380 U.S. 528, 534, 85 S.Ct. 1177, 1182, 14 L.Ed.2d 50 (1965). While it is true, as appellee points out, that the statutes here in question have yet to be construed by the courts of Florida, mere absence of judicial interpretation does not necessarily render their meaning unsettled or uncertain. Indeed, by their very terms the challenged statutes could scarcely be clearer in effect, if not in purpose13 that is, to rid Florida banking and trust interests of non-Florida competition in the area of investment counselling. As the Federal Reserve Board observed in denying appellants' application,14 there is simply no plausible construction of the challenged statutes under which appellants might be permitted to conduct their proposed business in Florida.
Thus, without more, abstention in the present case would appear improper. Appellee, however, contends that since the Florida Constitution contains a provision equivalent to the due process clause of the fourteenth amendment to the United States Constitution,15 the district court properly abstained in view of the possibility that state constitutional scrutiny by the courts of Florida might obviate the necessity of a federal constitutional decision.16 While appellee's position is not without support in this particularly problematic subcategory of Pullman -type abstention cases,17 we find the instant case controlled by the Supreme Court's holding in Wisconsin v. Constantineau, 400 U.S. 433, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971), that where a state statute can be challenged under essentially identical state and federal constitutional provisions, abstention is improper.
The three-judge court alternatively based its abstention on the proposition found in Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943), and a line of cases thereunder,18 that a federal court should refrain from exercising its jurisdiction in order to avoid needless conflict with the administration by a state of its own affairs."19 Although Burford type abstention shares with Pullman -type abstention the goal of " comity" in the broadest sense, the two doctrines differ substantially in both purpose and effect. While the purpose of Pullman -type abstention is to avoid unnecessary federal constitutional challenge to state law, a court invoking Burford -type abstention essentially defers to a state's overriding interest in the matters sub judice and, concomitantly, to the superior competence of the state's courts to adjudicate such matters. Thus, usually at issue in Burford -type cases are state regulatory matters20 such as regulation of natural resources,21 education,22 or eminent domain,23 where a paramount state interest is apparent,24 where the history of state judicial experience in the area indicates special reliability,25 or, even absent an established regulatory scheme, where the intrusion of federal adjudication might handicap state government.26 Unlike Pullman -type abstention, Burford -type abstention requires neither the presence of a state issue nor unclarity in pertinent state law. Rather, a court abstaining under Burford relegates a federal issue to state court adjudication because the federal issue touches some overriding state interest such as those just described. Moreover, rather than merely stay its proceedings pending state court adjudication, as in a Pullman -type case, a federal court abstaining under Burford normally dismisses the case.27
Federal Reserve Board approval is required for such "banking-related" activity by 12 U.S.C. § 1843(c)(8) and by 12 C.F.R. § 225.4(b)(1), promulgated thereunder
12 U.S.C. § 1846. See Whitney Nat'l Bank v. Bank of New Orleans & Trust Co., 379 U.S. 411, 85 S.Ct. 551, 13 L.Ed.2d 386 (1965)
Although § 2281 has since been repealed, it remains effective as to pending suits. Act of Aug. 12, 1976, Pub.L.No. 94-381, § 7
Cf. Cohens v. Virginia, 6 U.S. (Wheat.) 264, 19 U.S. 264, 5 L.Ed. 257 (1821)
See Baggett v. Bullitt, 377 U.S. 360, 375, 84 S.Ct. 1316, 12 L.Ed.2d 377 (1964); Propper v. Clark, 337 U.S. 472, 492, 69 S.Ct. 1333, 93 L.Ed. 1480 (1949)
Fla.Const. art. I, § 9. This provision has been held by the Supreme Court of Florida to be coextensive with the due process clause of the fourteenth amendment. See Georgia S. & F. Ry. Co. v. Seven-Up, 175 So.2d 39 (Fla.1965)
Although appellants have scrupulously avoided raising state constitutional issues, abstention, where proper, is not to be avoided by skillful casting of a plaintiff's complaint. By its nature, the abstention issue is raised either by a defendant or by the court sua sponte. See, e. g., Wisconsin v. Constantineau, 400 U.S. 433, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971)
See, e. g., Askew v. Hargrave, 401 U.S. 476, 91 S.Ct. 856, 28 L.Ed.2d 196 (1971); Reetz v. Bozanich, 397 U.S. 82, 90 S.Ct. 788, 25 L.Ed.2d 68 (1969)
E. g., Alabama Pub. Serv. Comm'n v. Southern Ry. Co., 341 U.S. 341, 71 S.Ct. 762, 95 L.Ed. 1002 (1951)
E. g., Kaiser Steel Corp. v. W.S. Ranch Co., 391 U.S. 593, 88 S.Ct. 1753, 20 L.Ed.2d 835 (1968)
E. g., Stainback v. Mo Hock Ke Lok Po, 336 U.S. 368, 383-84, 69 S.Ct. 606, 93 L.Ed. 741 (1949)
E. g., Martin v. Creasy, 360 U.S. 219, 79 S.Ct. 1034, 3 L.Ed.2d 1186 (1959)
See, e. g., Stainback v. Mo Hock Ke Lok Po, 336 U.S. 368, 69 S.Ct. 606, 93 L.Ed. 741 (1949); Pennsylvania v. Williams, 294 U.S. 176, 55 S.Ct. 380, 79 L.Ed. 841 (1935)
See e. g., Scott v. Germano, 381 U.S. 407, 85 S.Ct. 1525, 14 L.Ed.2d 477 (1965)
C. Wright, supra note 10, at 218; Bezanson, Abstention: The Supreme Court and Allocation of Judicial Power, 27 Vand.L.Rev. 1107, 1121-27 (1974)