Court Opinion

ID: 9480890
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:02:05.957203+00
Date Added: 2024-06-11T17:47:59.328865
License: Public Domain

EDITH H. JONES, Circuit Judge,
dissenting:
With all due respect to the conscientious efforts of the majority, I must disagree with their reading of the bank anti-tying provision, § 1972(1) of the Bank Holding Company Act Amendments of 1970. The statute expressly distinguishes between a bank’s suggesting that a customer use a particular service, and its forcing him to do so. That distinction settles this case, because there is no evidence that American Bank would have refused to lend Dibidale money if it did not hire Theriot as general contractor.
A. The Bank Anti-Tying Provision
Section 1972(1), denominated the bank anti-tying provision of the Bank Holding Company Act, contains five parallel proscriptions. Subsection D, applicable here, states:
A bank 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—
(D) that the customer provide some additional credit, property, or service to a bank holding company of such bank, or to any other subsidiary of such bank holding company....
In my view, the plain meaning of the statute, its similarity to the anti-tying provisions of the federal antitrust laws, and the history of its drafting all clearly indicate that a tying arrangement must be forced upon an unwilling party to constitute a violation.
In interpreting any statute, a court begins with the language of the Act itself. Mallard v. United States Dist. Court for Southern Dist. of Iowa, 490 U.S. 296, 109 S.Ct. 1814, 1818, 104 L.Ed.2d 318 (1989). Section 1972(1) proscribes defined tying practices that are a “condition or requirement” for a bank’s extension of credit.1 The terms “condition” and “requirement” are not specifically defined in the statute. In such a case, courts recur to the ordinary meaning of these terms, for we assume that Congress’s purpose was expressed by the ordinary meaning of the statutory language. See United States v. Locke, 471 *309U.S. 84, 95-96, 105 S.Ct. 1785, 1792-93, 85 L.Ed.2d 64 (1985). The dictionary defines “condition” and “requirement” synonymously as “something essential to the appearance or occurrence of something else.” Webster’s Ninth New Collegiate Dictionary (1985). Thus, a tying arrangement must by ordinary definition be essential to the loan before it is condemned by § 1972(1). That a “condition or requirement” must be essential to the loan negates the majority’s hypothesis that mere voluntary action by a bank customer, undertaken in the hope that it will improve his chance to secure a loan, violates the act.2
The majority do not disagree that the plain meaning of “condition or requirement” is that a bank must insist upon the tying transaction with its customer. Rather, they concede the plain meaning but argue that “to restrict the scope of those words to tying arrangements in which a seller is literally forced to purchase or provide a tied product or service in order to obtain credit would vitiate [§ 1972’s] intended role ...” Thus, the majority go beyond the plain meaning of the language in the statute to express its “spirit.” I shall not pause to engage in the debate over the proper role of judges in matters of statutory construction, but I cannot agree that a statute as clear as this one needs, in effect, a judicial amendment to express its purpose.
The majority’s invocation of the “spirit” of the bank anti-tying law is conjured from flawed legislative history. It is well-recognized that § 1972(1) derives from the Sherman and Clayton Acts’ anti-tying measures and should be interpreted in that light. In Swerdloff v. Miami Nat’l Bank, 584 F.2d 54, 58-59 (5th Cir.1978), this Court held that reference to antitrust statutes when construing § 1972 is “most pertinent in view of the substantial similarity of the Acts.” See also Campbell v. Wells Fargo Bank, 781 F.2d 440, 443 (5th Cir.1986); Exchange Nat’l Bank of Chicago v. Daniels, 768 F.2d 140, 143 (7th Cir.1985); Parsons Steel, Inc. v. First Alabama Bank of Montgomery, 679 F.2d 242, 245 (11th Cir.1982). Under the federal antitrust statutes, a tying arrangement is illegal when there exists: (1) two separate products; (2) sufficient market power in the tying market to coerce purchases of the tied product; (3) involvement of a not insubstantial amount of interstate commerce in the tied market; and (4) anticompetitive effect in the tied market. Crossland v. Canteen Corp., 711 F.2d 714, 722 (5th Cir.1983). Pursuing this analogy correctly yields two results. First, as the majority state, Congress broadened § 1972(1) beyond the Sherman and Clayton Acts by dispensing with the need for proof of the economic power of the bank (i.e., the seller) and the anti-competitive effects of a tying arrangement in the tied market. Congress also eliminated the need to prove the involvement of a not insubstantial amount of interstate commerce in the tied product.
Equally important, however, Congress declined to alter the rule that a tying arrangement violating federal anti-trust laws must be imposed upon a buyer as a requirement of a deal with the seller of the “tying” product. This rule has found repeated expression in our Court:
Actual coercion is an indispensable element of a tie-in charge. A manufacturer may use strong persuasion, encouragement, or cajolery to the point of obnoxiousness to induce a party to buy incidental products and services. An anti-trust violation occurs only if [the manufacturer] goes beyond persuasion and coerces or forces its customers to buy the specified product in order to obtain the tying product.
Bob Maxfield, Inc. v. American Motors Corp., 637 F.2d 1033, 1037 (5th Cir. Unit *310A), cert. denied, 454 U.S. 860, 102 S.Ct. 315, 70 L.Ed.2d 158 (1981) (quoting Ogden Food Service Group v. Mitchell, 614 F.2d 1001, 1002 (5th Cir.1980).3
The harmony between the anti-trust laws' coercion element and the "condition or requirement” language of § 1972(1) is apparent. That this harmony was intentional is confirmed by the drafting history of § 1972(1). Congress rejected a proscription of bank tying activities founded on a “condition, agreement or understanding” between the parties in favor of the Bennett Amendment, which enacted the more demanding standard of a bank’s imposing a “condition or requirement.” These connections between the anti-trust laws, the drafting history, and the clear language ultimately selected by Congress cannot be meaningless. On the contrary, they represent the kind of legislative history that is particularly reliable, and they point only one way: toward the mandate that express, not “understood,” tying provisions violate § 1972(1).
The majority misread this legislative background. Their opinion disregards the antitrust coercion element by sleight of hand. According to the majority, because Congress deliberately forebore to incorporate the market power and substantial effect on commerce elements of antitrust tying law into the bank anti-tying amendments, it also decided, albeit inferentially, to forebear incorporating the element of coercion. A more logical interpretation of Congressional intent would draw the opposite conclusion. We assume that Congress was familiar with all three elements of the antitrust tying law. Because only two of those elements are specifically absent from the analogous bank statute, Congress must have meant to retain the third element. It also appears that the majority have confused proof of market power — which has been required under the antitrust laws because it confers the ability on a manufae-turer to tie sales of more than one product — with the element of coercion — which signifies the manufacturer’s choice or determination actually to engage in tying. As the Supreme Court stated:
Our cases have concluded that the essential characteristic of an invalid tying arrangement lies in the seller’s exploitation of its control over the tying product to force the buyer into the purchase of a tied product that the buyer either did not want at all, or might have preferred to purchase elsewhere on different terms. When such “forcing” is present, competition on the merits in the market for the tied item is restrained and the Sherman Act is violated.
Jefferson Parish Hosp. Dist. v. Hyde, 466 U.S. 2, 12, 104 S.Ct. 1551, 1558, 80 L.Ed.2d 2 (1984) (citing Times-Picayune Pub. Co. v. United States, 345 U.S. 594, 605, 73 S.Ct. 872, 878, 97 L.Ed. 1277 (1953). It is not at all illogical that Congress decided to assume the market power of each individual bank, while still requiring proof that a bank chose to exercise that power by conditioning or requiring tying arrangements with customers.
The majority also rely on a policy determination, supported by one isolated comment from the Congressional Conference Report on § 1972(1), to conclude that a banking relationship is “inherently coercive,” from which it allegedly follows that coercion must be assumed whenever a tied transaction exists. Because this determination is contrary to the plain meaning of the “condition or requirement” statutory language, it is for that reason alone suspect. But the majority’s policy determination also requires reading the Bennett Amendment — which tightened the definition of a prohibited tying arrangement from one founded on a “condition, agreement or understanding” to one founded on a “condition or requirement” — in an unduly restrictive manner.4
*311Finally, the majority’s policy argument that “the unique nature of the banking industry renders it more important to prohibit conditional transactions in that context than in other less sensitive sectors of the economy” is hard to justify except as an expression of judicial preference for a predetermined result. Congress presumably enacted § 1972(1) in response to the Supreme Court’s Fortner I decision,5 which suggested that credit, unlike other goods or services in the economy, might not always be a tying product. That Congress then chose to bring credit within the purview of tying law does not, however, suggest precisely how it sought to accomplish that goal. An understanding of Congress’s motivation, in other words, does not substitute for employing the traditional tools of legal reasoning on the language of the statute. See Begier v. Internal Revenue Serv., — U.S. -, 110 S.Ct. 2258, 2269, 110 L.Ed.2d 46 (1990) (Scalia, J., concurring). Such an understanding certainly does not authorize courts to “strengthen” or “improve” the statute to better achieve Congressional goals. We assume Congress was capable of articulating its policy, complete with such limits as the give and take of lawmaking required. In this instance, Congress chose to eliminate the requirements of market power, substantiality of commerce in the tied product, and anticom-petitive effects in the tied market from existing antitrust tying law. Neither the language of § 1972 nor its drafting history indicates, however, a separate determination to eliminate the requirement that a tying arrangement be literally required of a bank customer. The majority’s interpretation of § 1972(1), in the guise of enforcing Congressional policy, actually has to ignore the plain meaning of a “condition or requirement.”
Accordingly, I respectfully disagree with the majority and would hold that § 1972(1)(D) is violated only if a bank imposes as a condition or requirement of lending that its customer perform other services for the bank or its affiliated company.
B. Summary Judgment Proof
Whether § 1972(1)(D) is construed by the majority’s standard or by its precise language, summary judgment was properly rendered for the bank. In my view, the language of § 1972(1)(D) speaks to situations in which a bank has made some attempt to force the customer into providing a service to a bank affiliate that he would not otherwise provide absent a threat to deny him credit. The evidence in this case does not rise to that level. The strongest evidence Dibidale could muster with respect to proving a “requirement” or “condition” that Dibidale hire Theriot came from Nicholas Popich. In his affidavit, Popich stated that:
“because Dibidale wanted the loan from the American Bank, which was strongly urging the use of Theriot throughout the loan negotiations and since we had no adverse information about Theriot, Dibi-dale did not protest the selection of Ther-iot as the project manager/general contractor.”
Popich's affidavit is revealing. The bank may have informed Dibidale of the contractor that it preferred, or it may have even encouraged or persuaded Dibidale to accept the contractor. What is completely absent both from Popich’s affidavit and from the record in general, is any evidence that the bank ever told Dibidale, either expressly or impliedly, that it must use Theriot or face a refusal to make the loan.
On the contrary, in several instances Dibidale admitted that no such condition or requirement of the loan was ever expressed. Popich’s deposition states: “for the record, though, [the bank] never once told me to give [Theriot] the work in spite of anything.” Even the loan agreement *312indicates that Dibidale was not required to employ Theriot as contractor:
Borrower hereby confirms and certifies that the selection of ... [Theriot] was his choice from among numerous possible general contractors and that he was not coerced or forced by Lender in any manner to choose [Theriot]....
Not only is this provision unambiguous and unequivocal, it was, according to deposition testimony, inserted in the loan agreements at the insistence of Dibidale’s attorneys. Unlike the majority, I see no reason for discounting the significance of this provision (at 307 n. 4), especially when it is in perfect rapport with Dibidale’s own affidavit and deposition testimony.
Even if I agreed with the majority’s expansive reading of § 1972(1)(D), I still could not conclude that the district court improperly granted summary judgment in this case. Dibidale’s evidence no more establishes an “implied condition” than it does an express one. Dibidale offered no testimony that it accepted Theriot as contractor because it feared the bank would not otherwise extend credit. Dibidale never suggested that it hired Theriot because it believed — despite what the bank may or may not have said — that it had to provide this “incidental” service to the bank in order to obtain a loan. In his deposition, Mr. Popich stated that he was perfectly comfortable with Theriot’s being the general contractor. As he put it, “[t]he Bank, as far as I was concerned was supportive of Ronnie [Theriot]; [if he was] good enough for the Bank, he was good enough for me.”
The majority caution that “credibility assessments are not fit grist for the summary judgment mill.” Yet, unless it is a court’s function to make the non-movant’s case for him — by doubting the trustworthiness of his own statements — I fail to see what credibility assessments were necessary in this case. Popich’s affidavit opposing summary judgment, the only evidence on Dibidale’s behalf, is more self-serving than his earlier, more candid deposition testimony. But as has been seen, none of Popich’s statements under oath raise a genuine fact issue that the bank expressly or impliedly conditioned or required that its loan to Dibidale be accompanied by the hiring of Theriot.
Whether it considered Dibidale’s deposition testimony, affidavit testimony, or all the testimony combined, the district court could not have discovered a genuine factual issue relating to any condition or requirement, either express or implied. In my opinion, summary judgment was not just appropriate in this case, it was mandated. Accordingly, I respectfully dissent.

. The precise statutory language encompasses tying, exclusive dealing and reciprocity arrangements related to the extension of credit, leasing or selling of property, furnishing of services, or fixing or varying the consideration for these activities. My discussion applies to all of the act’s coverage, but I refer to extension of credit throughout this discussion as a shorthand reference to the whole.

. The plain meaning of § 1972(1) was clear enough to the Third Circuit which, in ruling against a bank customer's claim under § 1972(1)(C), held: "There is no evidence that Tose’s ouster in favor of Barness was made a ‘condition or requirement’ of a loan to the Eagles or to Tose. Appellants allege only that Tose’s ouster in favor of Barness was the hidden agenda behind the conspiracy charged in count one. This does not satisfy the 'condition or requirement' element of § 1972(1)(C)." Tose v. First Pennsylvania Bank, N.A., 648 F.2d 879, 897 (3d Cir.1981), cert. denied, 454 U.S. 893, 102 S.Ct. 390, 70 L.Ed.2d 208 (1981).

. See also Jefferson Parish Hosp. Dist. v. Hyde, 466 U.S. 2, 13-16, 104 S.Ct. 1551, 1558-60, 80 L.Ed.2d 2 (1984); Bruce v. First Federal Sav. and Loan Assoc., 837 F.2d 712, 715-16 (5th Cir.1988); Tic-X-Press, Inc. v. Omni Promotions Co., 815 F.2d 1407, 1415 (11th Cir.1987).

. The majority opinion states that Senator Bennett’s purpose was to exclude merely simultaneous banking transactions from the scope of § 1972(1). Their quotation from his statement in the Congressional Record goes on to say that, "The bill as amended would require that a con*311dition or requirement imposed by the bank must be demonstrated in order to prove that a violation has occurred.” Conf.Rep. (emphasis added) At the very least, this language does not comment on the degree of coercion required beyond non-simultaneity. More likely, it emphasizes that the bank must impose a violative tying arrangement on the customer.

. Fortner Enterprises v. United States Steel Corp., 394 U.S. 495, 89 S.Ct. 1252, 22 L.Ed.2d 495 (1969).