United States v. Citizens & Southern National Bank

PETITIONER:United States
RESPONDENT:Citizens & Southern National Bank
LOCATION:Chicago, Illinois

DOCKET NO.: 73-1933
DECIDED BY: Burger Court (1972-1975)

CITATION: 422 US 86 (1975)
ARGUED: Mar 19, 1975
DECIDED: Jun 17, 1975

Daniel B. Hodgson – for appellees
Friedman –

Facts of the case


Media for United States v. Citizens & Southern National Bank

Audio Transcription for Oral Argument – March 19, 1975 in United States v. Citizens & Southern National Bank

Audio Transcription for Opinion Announcement – June 17, 1975 in United States v. Citizens & Southern National Bank

Warren E. Burger:

The judgment and the opinion of the Court in 73-1933, United States against Citizens & Southern National Bank and a 74-452, Twentieth Century Music Corp. against Aiken would each be announced by Mr. Justice Stewart.

Potter Stewart:

In the first of these cases, 73-1933, we deal with a direct appeal from United States District Court for the Northern District of Georgia.

For many years the State of Georgia restricted banks located in cities from opening branches in suburban areas.

To circumvent these restrictions in the Atlanta area, the Citizens & Southern National Bank formed the Citizens & Southern Holding Company, and the latter company embarked on a program of forming de facto branch banks in the suburbs of Atlanta.

This program involved, among other features, ownership by the Holding company of 5 percent of the stock of each of the suburban banks, the maximum allowed by state law, ownership of much of the remaining stock by parties friendly to Citizens & Southern, use by the suburban banks of the Citizens & Southern logogram and of all of Citizens & Southern banking services, and close Citizens & Southern oversight of the operation and governance of each one of the suburban banks.

The expectation on all sides by Citizens & Southern, by the suburban banks, and by state and federal bank regulators, was that Citizens & Southern would acquire these five percent banks outright, and convert them into de jure branches, as soon as state law, or the Atlanta city limits were altered so as to permit the accomplishment of this end.

In 1970, the state law was changed.

Georgia amended its banking statutes to allow de jure branching on a countywide basis.

Because the city of Atlanta is contained within two counties, DeKalb and Fulton, which encompassed the Atlanta suburbs in which the 5-percent banks operated, this change in the law meant that Citizens & Southern could now absorb the five percent banks as true branches.

Citizens & Southern consequently applied to the Federal Deposit Insurance Corporation, under the Bank Merger Act of 1966, for permission to acquire all of the stock of six of the five percent banks which had been operated by yet as de facto branches.

That Federal agency authorized all but one of the proposed acquisitions.

The Justice Department immediately commenced this litigation in a Federal District Court for injunctive relief, alleging that the five acquisitions authorized by the Federal Deposit Insurance Corporation would lessen competition in relevant banking markets, and thus violate Section 7 of the Clayton Act, and that the historic “de facto branch” relationship between Citizens & Southern and the six 5-percent banks constituted unreasonable restraints of trade in violation of Section 1 of the Sherman Act.

After a trial, the court rendered judgment for on all the issues in favor of Citizen & Southern.

The Government appealed under Section 2 of the Expediting Act directly to this Court and we noted probable jurisdiction.

For the reasons set out in detail in a rather lengthy written opinion filed today we affirm the judgment of the district court.

Mr. Justice Brennan has filed the dissenting opinion which Mr. Justice Douglas and Mr. Justice White have joined.