United States v. First Nat. Bancorporation, Inc.

PETITIONER: United States
RESPONDENT: First Nat. Bancorporation, Inc.
LOCATION: Paris Adult Theater

DOCKET NO.: 71-703
DECIDED BY: Burger Court (1972-1975)

CITATION: 410 US 577 (1973)
ARGUED: Oct 16, 1972 / Oct 17, 1972
DECIDED: Feb 28, 1973

Eugene J. Metzger - for appellees
Friedman -

Facts of the case


Media for United States v. First Nat. Bancorporation, Inc.

Audio Transcription for Oral Argument - October 16, 1972 in United States v. First Nat. Bancorporation, Inc.

Audio Transcription for Oral Argument - October 17, 1972 in United States v. First Nat. Bancorporation, Inc.

Warren E. Burger:

Are you ready?

You have a 12 minutes remaining.


Mr. Chief Justice, may it please the Court.

I'd like to turn out one other important aspect of this case and that is the reason why we think that Bancorporation's elimination was a potential, and it was particularly significant because Bancorporation, we believe, was one of the few firms in the State of Colorado that was likely to be an important and significant competitor.

Our opponents tell us that Bancorporation was insignificant as a potential and I think they say, “Anybody can organize a bank.”

They say, “It's not very difficult, a few people get together, get together a little capital and organize a bank.”

That's quite true, of course, but it's only, we think, a large bank, a bank with the resources, that Bancorporation has that does hold out a real potential for shaking up this market.

Now, there are, at the present time, in the State of Colorado that work upon this acquisition, seven holding companies.

Two of them are already operating in the Greeley market.

The third one, a very large holding company called Western Bancorporation, a multibillion-dollar concern under federal law is precluded from having anymore banks in Colorado, so that takes care of three.

One of these other holding companies is quite small.

It's no larger, basically, than the bank to be acquired, that's four.

Now the remaining three in the State of Colorado, Bancorporation is by far the largest.

In fact, it's about twice as large as the other two.

So that it seems to us that viewing this whole situation in Colorado that Bancorporation is now the leading holding company, the biggest holding company that is not in the market and is a firm that has indicated its intention of going into the market.

And, of course, as I've mentioned before, this is not an isolated phenomenon by Bancorporation.

All of the holding companies in the State of Colorado are all attempting to spread out and to gain as many banks as possible.

The vigor of the -- this action by the holding companies is not surprising because banking, unlike most other businesses, has very strict geographical limits.

Now, holding a bank, can't just expand around the country.

A bank, by definition under state law can only stay in the one State and under federal law, a holding company cannot acquire banks outside of the State where its principal activity takes place.

So that Bancorporation, we think, is the most likely entrant.

This is the firm whose elimination as a potential competitor is likely to have the greatest impact in the market.

We think that this trend toward concentration is continuing in the State and that the -- permitting Bancorporation to come into this market to eliminate its potential competition and to take over the existing share of the market, this large share, approximately one-third, that it is now held by the single non-holding company affiliated large bank is just the kind of anti-competitive probability that the Congress intended to bar in Section 7, when it prohibited acquisitions whose effect, maybe -- I stress it may be once again we're dealing with probabilities, not certainties, whose effect may be substantially to lessen the competition.

And I would like to reserve the balance of my time for rebuttal, Mr. Chief Justice.

Warren E. Burger:

Mr. Metzger.

Eugene J. Metzger:

Mr. Chief Justice, and may it please the Court.

In the statement of the case yesterday, Mr. Friedman made reference to certain matters outside the record in this case to the extent that those matters are conceived to be of any relevance by any members of this Court, appellees hastened to say that we do not accept the Government's representations as to what those facts are.

As an example of one instance in which we are in disagreement as to those facts, we respectfully direct the Court's attention to footnote 57 on page 44 of our brief.

In answer to a question from Mr. Justice Blackmun yesterday, it was suggested that the Government would not have brought this case, had we chosen the ultimate means of entry into the market in question.

We had not understood it to be the law that a merger would be precluded simply because there were ultimate means of entering into a particular market available.