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INDEPENDENT INSURANCE AGENTS OF AMERICA, INC. v. HAWKE

March 24, 1999

INDEPENDENT INSURANCE AGENTS OF AMERICA, INC., NATIONAL ASSOCIATION OF PROFESSIONAL INSURANCE AGENTS, INC., NATIONAL ASSOCIATION OF LIFE UNDERWRITERS, NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES, CROP INSURANCE RESEARCH BUREAU, PLAINTIFFS
v.
JOHN D. HAWKE, JR., IN HIS CAPACITY AS COMPTROLLER OF THE CURRENCY, AND THE OFFICE OF THE COMPTROLLER OF THE CURRENCY, AN AGENCY OF THE UNITED STATES, DEFENDANTS.



The opinion of the court was delivered by: June L. Green, District Judge.

Before the Court are two dispositive motions: Defendants' Motion to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, and Plaintiffs' corresponding Motion for Summary Judgment pursuant to Rule 56. For the reasons that follow, the Plaintiffs' motion is granted and the Defendants' motion is denied.

BACKGROUND

This case was brought following the issuance of an interpretive letter by the Office of the Comptroller of the Currency ("OCC") (Letter of Julie L. Williams, 12/24/97 ("OCC Letter")). The OCC Letter purported to resolve a question regarding whether, under the National Bank Act ("NBA"), 12 U.S.C. § 1 et seq., National Banks are permitted to sell "crop insurance" to farmers in connection with farming loans (without regard to the population size of the locale). The Comptroller, finding that the sale of such insurance was part of, or incidental to, the business of banking, concluded that it was within the range of permissible banking activities covered under 12 U.S.C. § 24 (Seventh). Id. Taking exception with this ruling, the Plaintiffs filed suit here and these motions followed.

DISCUSSION

As an initial matter, the Court notes that the two motions cover the exact legal issues, yet are brought pursuant to two different Federal Rules of Civil Procedure: Rules 12(b)(6) (Def. — Motion to Dismiss on the Pleadings) and 56 (P1. — Motion for Summary Judgment). Insofar as the parties rely on documentation outside of the Pleadings (and the same result would be reached under either analysis), the Court finds that the issues are more appropriately analyzed under the Rule 56 standard.

Summary Judgment Standard

A motion for summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), Here, the essential facts are not in dispute and the Court therefore focuses its analysis on the correct interpretation of the relevant statutes and applicable legal principles.

The parties seek a ruling from this Court regarding whether 12 U.S.C. § 24 (Seventh) of the NBA may be interpreted to permit national banks to sell "crop insurance" to farmers, or whether such activity is impliedly prohibited by other sections of the NBA. Essentially, this is an appeal of the Comptroller's interpretation that section 24 allows national banks to engage in such activity.

The "Chevron" Analysis

It is well settled that an interpretive ruling by an agency, charged with enforcing a law, is to be given controlling weight if it is reasonable and not "arbitrary, capricious or manifestly contrary to the statute." Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Such deference is secondary, however, to the threshold query of whether Congress has spoken directly to the issue. If "`the intent of Congress is clear, [t]hat is the end of the matter.'" Nations-Bank of N.C., N.A. v. Variable Annuity Life Ins. Co., 513 U.S. 251, 115 S.Ct. 810, 130 L.Ed.2d 740 (1995) (quoting Chevron, 467 U.S. at 842, 104 S.Ct. 2778). The deferential portion of the analysis is triggered only when the statute is "silent or ambiguous with respect to the specific issue." Chevron at 843, 104 S.Ct. 2778. It is under this framework that the Court undertakes to reconcile the issues at bar.

The National Banking Act

At issue are two potentially conflicting statutes: 12 U.S.C. § 24 (Seventh) and 12 U.S.C. § 92. The Plaintiffs argue that the statutes are not ambiguous and the Comptroller's decision, therefore, is not entitled to deference. The Court agrees.

Title 12 U.S.C. § 24 (Seventh) of the National Bank Act of 1864 states in relevant part:

  [national banks shall have the power] to
  exercise . . . all such incidental powers
  as shall be necessary to carry on the
  business of banking; by discounting
  and negotiating promissory notes, drafts,
  bills of exchange, and other evidences
  of debt; by receiving deposits; by buying
  and selling exchange, coin, and bullion;
  by loaning ...

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