Barnett Bank of Marion County, N.A. v. Nelson

PETITIONER: Barnett Bank of Marion County, N.A.
RESPONDENT: Nelson, Florida Insurance Commissioner, et al.
LOCATION: Eastern District Court of Michigan

DOCKET NO.: 94-1837
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Eleventh Circuit

CITATION: 517 US 25 (1996)
ARGUED: Jan 16, 1996
DECIDED: Mar 26, 1996

Ann M. Kappler - for private respondents
Ann Mary Kappler - on behalf of the Private Respondents
Daniel Y. Sumner - on behalf of the State Respondents
Nathan Lewin - on behalf of the Petitioner
Richard P. Bress - on behalf of the United States, as amicus curiae, supporting the Petitioner
Richard P. Press - for the United States as amicus curiae, by special leave of the Court

Facts of the case


Media for Barnett Bank of Marion County, N.A. v. Nelson

Audio Transcription for Oral Argument - January 16, 1996 in Barnett Bank of Marion County, N.A. v. Nelson

William H. Rehnquist:

We'll hear argument next in Number 94-1837, the Barnett Bank of Marion County v. Bill Nelson, Florida Insurance Commissioner.

Mr. Lewin.

Nathan Lewin:

Mr. Chief Justice and may it please the Court:

This case concerns the validity of a Florida statute enacted in 1974 that flatly prohibits financial institutions such as banks, including national banks, from selling life and fire insurance.

The case is here on certiorari to the Eleventh Circuit, which upheld the Florida law on the remarkable proposition that a law that prohibits banks from selling life insurance is, within the meaning of the McCarran-Ferguson Act, a law that regulates the business of insurance, while a 1916 Federal law that explicitly does the contrary and authorizes national banks to sell life insurance is not, within the meaning of the very same McCarran-Ferguson Act, a law that specifically relates to the business of insurance.

The statement of that proposition is, we submit, its own refutation.

Flatly prohibiting all banks from engaging in the business of being an insurance agent is, we believe, not a bona fide regulation of the business of insurance, but if it is, then its converse, the 1916 Federal law that authorizes national banks to do precisely what the Florida law prohibits... that is, to sell life insurance through licensed agents... must be a law that specifically relates to the business of insurance.

Now, that language that I've been referring to... regulates the business of insurance or relates to the business of insurance... grows out of the two pronged test of validity prescribed by the McCarran-Ferguson Act whenever an act of Congress conflicts with any law enacted by any State.


Antonin Scalia:

Mr. Lewin, I assume that the Florida courts and the... or the Eleventh Circuit's view of the matter is that the Florida statute is a statute that governs insurance.

It's about insurance.

The Federal statute is a statute that's about banks.

Now, what it says banks can do is sell insurance, but I think what the Eleventh Circuit says is that doesn't specifically relate to insurance within the meaning of the statute, because the provision is about banks.

Nathan Lewin:

--The statutes, Justice Scalia, of course use the word regulate in the first portion of--

Antonin Scalia:


Nathan Lewin:

--the section, and it says that the State law, in order to even satisfy the first of these two hurdles, has to have as its purpose regulating the business of insurance.

The broader term is the second term.

The second term speaks about relates to the business of insurance.

It appears to us, certainly, you can't, even... even if a statute speaks about banks, it also relates to insurance if it says, as the 1916 law does, specifically that banks may sell insurance policies, if--

Antonin Scalia:

I agree with you that any legislation that regulates insurance relates to insurance, but does any legislation that regulates insurance specifically relate to insurance?

Nathan Lewin:

--It does, Justice--

Antonin Scalia:

You could regulate it... can't you regulate insurance in passing?

I mean, that's the argument made here, that really they... the Federal legislation may... you may even say it regulated insurance, but it did it only in passing, not specifically.

Nathan Lewin:

--But the word specifically, we submit, means to distinguish between the statutes that would include insurance within some broader statutory term, commercial services, various kind... but certainly a statute specifically relates to insurance when the word insurance appears in that statute five times.

If the Court will look at section 92, which appears at 1a and 2a of the appendix to our brief, life... fire... life or other insurance is specified in there, and the word insurance appears explicitly in that statute on five different occasions.

Nothing could be more--

Ruth Bader Ginsburg:

Mr. Lewin, even so, why can't one read these two provisions, the State and Federal, as compatible, as not in conflict?

The Federal law may specifically relate to insurance, but why not... as one of your opponents argued, why not read the Federal law as simply giving the banks permission to enter this line of business which it couldn't enter without Federal permission, just giving it Federal permission, yet subject to whatever regulation the State may choose to put on it?

Nathan Lewin:

--Justice Ginsburg, there are several answers, I think, to that question.

First of all, because the statute does not specifically say that.