Bankamerica Corporation v. United States

PETITIONER: Bankamerica Corporation
RESPONDENT: United States
LOCATION: Shell Lake, Wisconsin

DOCKET NO.: 81-1487
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 462 US 122 (1983)
ARGUED: Jan 19, 1983
DECIDED: Jun 08, 1983

Edwin S. Kneedler - on behalf of Respondents
William H. Simon - on behalf of the Petitioners

Facts of the case


Media for Bankamerica Corporation v. United States

Audio Transcription for Oral Argument - January 19, 1983 in Bankamerica Corporation v. United States

Warren E. Burger:

We'll hear arguments next in Bank America Corporation against the United States.

I think you may proceed whenever you are ready.

William H. Simon:

Mr. Chief Justice, may it please the Court:

The issue here is whether Section 8 of the 1914 Clayton Act, which bars corporate director interlocks between two or more corporations other than banks, applies to one bank and one non-bank; namely, one bank and an insurance company.

The appellants here are four insurance companies, three banks, three bank holding companies, and three individuals who were directors at the same time of both a bank and an insurance company.

Both the District and the Circuit Courts found that 40 percent of all insurance directors in America were also directors of banks, and that this situation had prevailed for a long time, and yet until the filing of this case, 61 years after the enactment of the statute, the government had never attacked the bank-insurance interlock.

Indeed, the amicus brief of the American Council of Life Insurance states that 79 percent of their insurance company members have one or more bank directors on their board.

This case was tried in the District Court in San Fransicso before Chief Judge Peckham on a fully stipulated record.

He found that the statute did not apply to an insurance-bank interlock.

On an appeal to the Ninth Circuit in an opinion by Chief Judge Browning, joined in by Senior District Judge Christianson, the Court found that the statute did bar the interlock but Circuit Judge Kennedy dissented.

Thus, one District Judge and one Circuit Judge has held the act inapplicable to this interlock, each holding that the statutory language was clear and unequivocal and on the other hand one Circuit Judge and one District Judge has held that the act is applicable conceding, however, and I quote, "The meaning remains equivocal" and, I quote again,

"the language may be read with equal plausibility. "

as it was read by the District Court.

Judge Browning's opinion issued 34 months after the oral argument.

We urge affirmance of the District Court judgment on the grounds, first, of the face of the statute; secondly, if Your Honors get that far, the clear legislative history; and finally, 60 years of uninterpreted administrative construction of the statute by the Department of Justice, the Federal Trade Commission, and the Congress.

William H. Rehnquist:

Do you mean uninterpreted or uninterrupted?

William H. Simon:

Both, Mr. Justice Rehnquist.

The language of the statute, I submit, is clear, and it appears in several places in the brief, but one page is page 2 of our brief, which is the blue brief.

And the statute provides as follows: No person at the same time shall be a director, one, in any two or more corporations; two, any one of which has capital in surplus of a million dollars... and I point out where the Congress meant any one of them; it said any one of them has capital of a million dollars; three, engaged in whole or in part in commerce, which I submit means two or more corporations engaged in whole or in part in commerce; and four, other than banks, banking associations, trust companies, and common carriers subject to the Interstate Commerce Commission Act.

In his opinion in the District Court Judge Peckham said of that language, and I quote from his opinion,

"An examination of this language reveals four criteria which must be met before this statute may be applied: First, a person must simultaneously serve as a director of two or more competing corporations; second, at least one of the corporations must have capital surplus and undivided profits of greater than a million dollars; third, both or all of the corporations must be engaged in interstate commerce; and fourth, the corporations must be other than banks, banking associations, trust companies, or common carriers. "

We submit that two corporations other than banks and common carriers excludes two corporations, one of which is a bank or a common carrier.

There are three different provisions relating to three different classes of corporations in this statute as showing that Congress did not have in mind a uniform legislative purpose.

The second and third unnumbered paragraphs of the House bill relate to banks.

And as presently amended, they apply only where one of the banks is a member of the Federal Reserve System and no more than a third of the banks in the country are members of the Federal Reserve System.

And it includes not only directors but officers and employees as to which interlocks are also prohibited.

The fourth... excuse me, the first unnumbered paragraph of the House bill, which is now Section 10 of the Clayton Act, relates to common carriers.

It in no way prohibits interlocking directorates between competing common carriers.

It provides only that when there is an interlocking directorate between a borrower and a lender or a supplier and a purchaser, that the transactions must be on public bids.

And then the fourth unnumbered paragraph of Section 8 is the one which we have here which throughout the legislative history was referred to as the Industrial Corporations Act.