Opinion ID: 500378
Heading Depth: 1
Heading Rank: 2

Heading: Conjunctive versus Disjunctive

Text: 9 The antitying provision of the Thrift Institutions Restructuring Act (TIRA) provides as follows: 10 (1) An association shall not in any manner extend credit, lease, or sell property of any kind, or furnish any service, or fix or vary the consideration for any of the foregoing, on the condition or requirement-- 11 (A) that the customer shall obtain additional credit, property, or service from such association, or from any service corporation or affiliate of such association, other than a loan, discount, deposit, or trust service; 12 (B) that the customer provide additional credit, property, or service to such association, or to any service corporation or affiliate of such association, other than those related to and usually provided in connection with a similar loan, discount, deposit, or trust service; and 13 (C) that the customer shall not obtain some other credit, property, or service from a competitor of such association, or from a competitor of any service corporation or affiliate of such association, other than a condition or requirement that such association shall reasonably impose in connection with credit transactions to assure the soundness of credit. 14 12 U.S.C.A. Sec. 1464(q)(1) (Supp.1987) (emphasis added). TIRA expressly creates a private cause of action for those injured by violations of section 1464(q)(1). Id. Sec. 1464(q)(3). Bruce alleges violations of subsections (1)(B) and (1)(C) which prohibit reciprocal and exclusive dealing arrangements. First Federal contends that Bruce's failure to allege a violation of subsection (1)(A), the prohibition of tying arrangements, is fatal to the complaint because the statute is written in the conjunctive. 1 Bruce maintains that the statute should be read in the disjunctive despite the use of the word and. 15 When we construe a statute, [o]ur objective ... is to ascertain the congressional intent and give effect to the legislative will. Philbrook v. Glodgett, 421 U.S. 707, 713, 95 S.Ct. 1893, 1898, 44 L.Ed.2d 525 (1975). 16 A basic canon of statutory construction is that words should be interpreted as taking their ordinary and plain meaning. Although in interpretation of statutory language reference should first be made to the plain and literal meaning of the words, the overriding duty of a court is to give effect to the intent of the legislature. A statute should ordinarily be interpreted according to its plain language, unless a clear contrary legislative intention is shown. 17 United States v. Scrimgeour, 636 F.2d 1019, 1022-23 (5th Cir.1981) (citations omitted). Although [t]he Supreme Court has given somewhat inconsistent instructions concerning the propriety of use of legislative history where the meaning of the words is plain on the face of the statute, it has looked to the statute's purpose where such meaning produced an unreasonable result 'plainly at variance with the policy of the legislation as a whole.'  Id. at 1023 (quoting United States v. American Trucking Ass'ns, 310 U.S. 534, 543-44, 60 S.Ct. 1059, 1063-64, 84 L.Ed.2d 1345 (1940)). The word and is therefore to be accepted for its conjunctive connotation rather than as a word interchangeable with or except where strict grammatical construction will frustrate clear legislative intent. 2 Peacock v. Lubbock Compress Co., 252 F.2d 892, 894-95 (5th Cir.1958). See generally 1A N. Singer, Sutherland on Statutes and Statutory Construction Sec. 21.14 (4th ed. 1980). 18 Prior to the adoption of TIRA, savings and loan associations were subject to 12 U.S.C.A. Sec. 1972(1) (1980), the antitying provision of the Bank Holding Company Act Amendments of 1970 (BHCA). 3 Section 1972(1) was intended to provide specific statutory assurance that the use of the economic power of a bank will not lead to lessening of competition or unfair competitive practices. S.Rep. No. 1084, 91st Cong., 2d Sess. 16, reprinted in 1970 U.S.Code Cong. & Admin.News 5519, 5535 [hereinafter S.Rep. No. 1084, reprinted in 1970 Cong. & Admin.News]. To achieve this end, section 1972(1) proscribes tying, reciprocity, and exclusive dealing arrangements. Id. at 45, reprinted in 1970 Code Cong. & Admin.News 5558 (supplementary view of Sen. Brooke). Such arrangements have been traditional targets of antitrust law because of their potentially anticompetitive effects. Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 10 & n. 15, 104 S.Ct. 1551, 1557 & n. 15, 80 L.Ed.2d 2 (1984); Freidco, Ltd. v. Farmers Bank, 499 F.Supp. 995, 1000 (D.Del.1980). 4 The wording of section 1972(1) and its legislative history indicates that Congress intended the statute to be read in the disjunctive. 5 Thus, a complaint states a claim under section 1972(1) by alleging violation of one or more subsections. See, e.g., Swerdloff v. Miami Nat'l Bank, 584 F.2d 54, 57 & n. 1 (5th Cir.1978) (claim stated by pleading violation of section 1972(1)(C)). 19 In 1982, Congress enacted TIRA in response to financial difficulties facing thrift institutions and the need to restructure the thrift industry. S.Rep. No. 536, 97th Cong., 2d Sess. 13, reprinted in 1982 U.S. Code Cong. & Admin.News 3054, 3067 [hereinafter S.Rep. No. 536, reprinted in 1982 Cong. & Admin.News]. With the adoption of TIRA, the antitying provision of BHCA no longer applied to savings and loan associations. 6 Section 1464(q)(1), however, was intended to subject federal thrift institutions to anti-tying restrictions generally comparable to those applicable to bank holding companies. S.Rep. No. 536, at 17, reprinted in 1982 Cong. & Admin.News 3071; see also id. at 55, reprinted in 1982 Cong. & Admin.News 3109. Although TIRA and BHCA prohibit essentially the same three types of arrangements, 7 BHCA connects its subsections with the word or while TIRA connects its subsections with the word and. Senate Report No. 536, despite being accompanied by a bill using the word and, 8 expresses an understanding that a violation occurs whenever an association engages in conduct proscribed by any one of TIRA's three antitying subsections. 20 The [antitying] provision prohibits an association from conditioning the availability or the terms of credit, property or services on a potential customer's agreement to:a. Obtain other credit, property, or services from the association, its service corporation or affiliates; 21 b. Provide other property, credit, or services to the association, its service corporation or affiliates; or 22 c. Refrain from obtaining other credit, property or services from a competitor of the association, its service corporation or affiliates. 23 In each case, the thrift institution may require appropriate conditions necessary for the soundness of the transaction. In sum, this provision is intended by the Committee to preclude anticompetitive practices where customers are required to accept or provide another service or product or to refrain from dealing with other parties in order to obtain the product or service that they want from the association. 24 Id. at 17, reprinted in 1982 Cong. & Admin.News 3071 (emphasis added). 25 To give a conjunctive meaning to the word and in section 1464(q)(1) would be to create an altogether different prohibition from section 1972(1), the professed paradigm of TIRA's antitying provision. Compare United States v. Moore, 613 F.2d 1029, 1042 (D.C.Cir.1979). Congressional discussion never deviated from the understanding that TIRA basically incorporated BHCA's antitying provision. 9 At no time did anyone dispute an intended identity between the two statutes in this regard, or reflect a conscious comprehension of a significant difference. Id. Aside from the wording of the statute, we have found no evidence that Congress intended to switch from the disjunctive in BHCA to the conjunctive in TIRA. Indeed, all of the evidence reveals that Congress specifically did not intend such a departure. 26 First Federal argues that section 1464(q)(1) should be given a literal reading because Congress adopted TIRA to help an ailing thrift industry. But Congress expressed its desire to aid the thrift industry by expanding an association's range of lending and related investment activities, not by effectively neutering the established proscription against tying arrangements. S.Rep. No. 536, at 13, reprinted in 1982 Cong. & Admin.News 3067. 27 First Federal also argues that [i]n construing a statute we are obliged to give effect, if possible, to every word Congress used. Reiter v. Sonotone Corp., 442 U.S. 330, 339, 99 S.Ct. 2326, 2331, 60 L.Ed.2d 931 (1978). But to read the word and in the disjunctive is to give the word its clearly intended effect. To read it in the conjunctive would nullify legislative intent. The proscriptive force of the statute would wither if an association could be held to violate section 1464(q)(1) only in the unlikely circumstance it imposed three distinct types of conditions amounting to three distinct types of tying arrangements. 28 The polestar that must guide a court in the task of construing a statute is congressional intent. Analysis of section 1464(q)(1), section 1972(1) and their legislative histories demonstrates that strict grammatical construction of section 1464(q)(1) would frustrate the clear intent of Congress. Section 1464(q)(1)(A)-(C) must be read in the disjunctive.