Beneficial National Bank v. Anderson

PETITIONER: Beneficial National Bank
RESPONDENT: Marie Anderson et al.
LOCATION: 1220 Student Activities Building - Undergraduate Admissions

DOCKET NO.: 02-306
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Eleventh Circuit

CITATION: 539 US 1 (2003)
ARGUED: Apr 30, 2003
DECIDED: Jun 02, 2003

ADVOCATES:
Beth S. Brinkmann - for the American Bankers Association et al. as amici curiae urging reversal
Brian M. Clark - Argued the cause for the respondents
Drew S. Days, III - for the American Bankers Association et al. as amici curiae urging reversal
Matthew D. Roberts - Department of Justice, argued the cause for the United States, as amicus curiae, supporting the petitioners
Seth M. Galanter - for the American Bankers Association et al. as amici curiae urging reversal
Seth P. Waxman - Argued the cause for the petitioners

Facts of the case

Several H&R Block customers, who took out loans from Beneficial National Bank in anticipation of their tax refunds, sued the bank in state court. The customers alleged that the bank charged excessive interest in violation of Alabama law. The bank asked that the case be heard in federal, rather than state, court, because the issues were covered under the National Bank Act (NBA), a federal law. The district court ruled in favor of the bank; the 11th Circuit Court of Appeals reversed, holding that the NBA did not completely preempt state laws governing lending rates and that the case could therefore be heard in state court.

Question

Does the NBA require that any suits involving charges of excessive interest be heard in federal rather than state court?

Media for Beneficial National Bank v. Anderson

Audio Transcription for Oral Argument - April 30, 2003 in Beneficial National Bank v. Anderson

Audio Transcription for Opinion Announcement - June 02, 2003 in Beneficial National Bank v. Anderson

William H. Rehnquist:

The opinion of the Court in No. 02-306, Beneficial National Bank versus Anderson will be announced by Justice Stevens.

John Paul Stevens:

Respondents are individual taxpayers who pledge their anticipated tax refunds to secure short-term loans from petitioner, a national bank chartered under the National Bank Act.

Respondents sued the bank and two other petitioners in an Alabama State Court claiming that the interest rates on their loans were usurious.

Petitioners removed the case to the Federal District Court asserting that the National Bank Act provides the exclusive cause of action for usury against the national bank that the suit therefore arose under Federal Law and thus could properly be removed to a Federal District Court.

The Court of Appeals for the Eleventh Circuit held this removal improper because it could not find clear congressional intent to permit such a removal.

We granted certiorari and today in an opinion filed with the Clerk, we reverse the judgment of the Eleventh Circuit.

The well-pleaded complaint rule provides that we examine only the allegations in the complaint and ignore potential federal defenses.

Thus, as a general rule, a complaint will not be removable if the complaint is not affirmatively allege a federal claim.

Congress has, however, created limited exceptions to this general rule.

In cases interpreting the Labor Management Relations Act and the Employee Retirement Income Security Act, we found that Congress completely preempted any state cause of action and therefore the case is alleging only state law causes of action for certain claims were nonetheless properly removable.

In a long line of cases, this Court has construed the National Bank Act as providing the exclusive cause of action for claims of usury against the national bank.

Consistent with this interpretation, we find that Congress has completely preempted such claims and that the suit was therefore properly removable.

Justice Scalia has filed a dissenting opinion in which Justice Thomas joined.