United States v. First National Bank & Trust Company of Lexington

PETITIONER: United States
RESPONDENT: First National Bank & Trust Company of Lexington
LOCATION: Alabama State Capitol

DOCKET NO.: 36
DECIDED BY: Warren Court (1962-1965)
LOWER COURT:

CITATION: 376 US 665 (1964)
ARGUED: Mar 04, 1964 / Mar 05, 1964
DECIDED: Apr 06, 1964

Facts of the case

Question

Media for United States v. First National Bank & Trust Company of Lexington

Audio Transcription for Oral Argument - March 05, 1964 in United States v. First National Bank & Trust Company of Lexington

Audio Transcription for Oral Argument - March 04, 1964 in United States v. First National Bank & Trust Company of Lexington

Earl Warren:

Number 36, Allen versus First National Bank and Trust Company of Lexington et al.

Mr. Friedman.

Daniel M. Friedman:

Mr. Chief Justice and may it please the Court.

This is a civil antitrust case in which the government is appealing from the dismissal by the District Court after trial of a compliant challenging a bank merger under the Sherman Act.

The merger involved a consolidation of the largest and the fourth largest bank in Fayette County, Kentucky and resulting institution, as I shall develop, had better than 50% of all the banking assets in the area.

Now in this case, unlike the Philadelphia bank case of last term, the government did not challenge this consolidation under Section 7 of the Clayton Act.

(Inaudible)

Daniel M. Friedman:

I think Mr. Justice and the reason for it is this.

At the time this suit was filed which was approximately about the time of the Philadelphia bank decision, there was considerable uncertainty as to whether Section 7 of the Clayton Act applied to the banks mergers.

We studied this case and this seemed to us to be a very strong case under the Sherman Act and in this circumstances, it was our considerate judgment that it would appropriate to charge, tackle this bank merger solely under the terms of the Sherman Act.

The --

William J. Brennan, Jr.:

(Inaudible)

Daniel M. Friedman:

Primarily Mr. Justice.

Potter Stewart:

Exclusively for it's oral argument then.

Daniel M. Friedman:

For it's oral argument and we -- as I have indicated we think that -- we had argued to the court that the Philadelphia Bank merger violated the Sherman Act, as I shall develop, we think this is an even stronger case than Philadelphia bank case.

The --

Arthur J. Goldberg:

(Inaudible)

Daniel M. Friedman:

Well I just don't know Mr. Justice.

It's -- the Philadelphia case certainly gives the government a very -- only weapon in dealing with this, but I would be reluctant to say that cases might not arise where it would be appropriate for us to have the Sherman Act.

And we also -- I might say we think that this case is brought under the Sherman Act, and we think in this case we have established a violation of the Sherman Act.

Lexington, Kentucky which is the county seat of Fayette County, Kentucky, is a medium sized city of about 60,000.

It's roughly -- the population of the county is roughly twice that.

The city has -- the whole area since the war has undergone a remarkable industrial development.

Prior to that time it was primarily a farming area.

Since the war, it has undergone rapid industrialization, characterized primarily by the influx of major national concerns which set up a number of plants in the area.

At the time of the merger which was March 1st, 1961, there were total of six banks in Fayette county and preliminary matter, the District court in this case treated Fayette County as the relevant geographic market within which -- to test the effect of this merger on competition and our opponents do not challenge that ruling.

The two merging banks were the First National Bank and Trust Company and Security Trust Company.

The First National was the oldest and the largest bank in the county.

At the time of the merger, it was more than twice the size of any of the other banks.

Between its founding in 1865 and 1929, it had been involved in 12 different mergers consolidations or takeovers and at the time of the merger its deposits were $58 million.