United States: Supreme Court Docket Report - October Term 2008

Originally published January 16, 2009

Keywords: Supreme Court, National Banking Act, OCC Regulatory Powers, False Claims Act, Cuomo v. The Clearing House Ass'n, home mortgage lending, U.S. ex rel. Eisenstein v. City of New York, qui tam

The Supreme Court granted certiorari today in two cases of interest to the business community:

• National Banking Act —Preemption—OCC Regulatory Powers
• False Claims Act—Time To Appeal

National Banking Act —Preemption—OCC Regulatory Powers

Under the National Banking Act, national banks "are not subject to any visitorial powers except as authorized by Federal law." 12 U.S.C. § 484(a). The agency charged with implementing the Act, the Office of the Comptroller of the Currency ("OCC"), has promulgated a regulation interpreting the "visitorial powers" provision to mean that, with limited exceptions, only the OCC may exercise such powers over national banks. 12 C.F.R. § 7.4000(a)(1). That regulation further provides that "State officials may not exercise visitorial powers with respect to national banks," and defines the exercise of such powers to include "conducting examinations, inspecting or requiring the production of books or records," and
"[e]nforcing compliance with any applicable federal or state law concerning" activities authorized by federal banking law." Id. § 7.4000(a)(1), (2)(iv). Today, the Supreme Court granted certiorari in Cuomo v. The Clearing House Ass'n, L.L.C. (No. 08-453) to determine whether the OCC regulation, which purports to interpret the preemptive scope of the National Banking Act, is a valid exercise of the agency's power that is entitled to deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

The Supreme Court's decision will be of significant importance, in the first instance, to national banks that may be subject to state enforcement actions. Given its potential implications for the scope of preemptive regulations more generally, the decision may also be important to entities in other industries that are regulated by both federal and state law.

As part of an investigation into the home mortgage lending industry, the New York State Attorney General informally requested certain national banks to produce non-public information about their lending policies and practices. Specifically, the Attorney General was concerned that the banks might have violated federal and state laws prohibiting creditors from discriminating on the basis of race. After the banks received the requests, the OCC and The Clearing House Association, a consortium of national banks, sued to enjoin the Attorney General's investigative and enforcement efforts. The district court granted injunctive relief, and the Second Circuit, deferring to the OCC's regulatory interpretation of the statute, affirmed in relevant part. 510 F.3d 105. The Attorney General sought certiorari, contending that the OCC's regulation was not entitled to deference because it purports to interpret the preemptive scope of a congressional enactment and that it was in any event invalid because it (allegedly) conflicts with the Supreme Court's authoritative interpretation of the National Bank Act in First Nat'l Bank in St. Louis v. Missouri, 263 U.S. 640 (1924).

Absent an extension, under the expedited briefing schedule set by the Court, amicus briefs in support of the petitioner are due March 4, and amicus briefs in support of the respondent are due April 1.

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False Claims Act—Time To Appeal

Under Rule 4(a)(1) of the Federal Rules of Appellate Procedure, the time for filing a notice of appeal in a civil action is 30 days, unless the United States is a party to the action, in which case the applicable period is 60 days. In most actions filed under the False Claims Act, 31 U.S.C. § 3730(a), the United States is the complaining party. In some instances, however, a private party files a qui tam action "in the name of the Government." Id. § 3730(b)(1). When a qui tam action is filed, the government may, but need not, intervene. Today the Supreme Court granted certiorari in U.S. ex rel. Eisenstein v. City of New York (No. 08-660) to decide whether the United States is, for purposes of calculating the time in which to appeal, deemed a "party" to a qui tam action in which it has not intervened.

The Court's resolution of this question, which has divided the lower courts, will clarify the time by which an appeal in a private qui tam action must be brought.

In the decision below, the Second Circuit held that, although the United States was a named party and the "real party in interest," the 30-day time limit set forth in Rule 4(a)(1)(A) governed the timeliness of the appeal because the United States had declined to intervene in the qui tam action. 540 F.3d 94, 98. That holding put it in conflict with a number of circuits, which had held that the 60-day time limit applies when the government is the real party in interest.

Absent an extension, under the expedited briefing schedule set by the Court, amicus briefs in support of the petitioner are due March 4, 2009, and amicus briefs in support of the respondent are due April 1, 2009.

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Earlier this week, the Supreme Court invited the Solicitor General to file briefs expressing the views of the United States in two cases of interest to the business community:

Cable News Network, Inc. v. CSC Holdings, Inc., No. 08-448. The question presented is whether a cable company's on-demand service infringes the copyrights held by content providers by copying, storing, and transmitting their programs without an additional license.

Fin-Ag v. Pipestone Livestock Auction Market, Inc., No. 08-576. The issue presented is whether a commission merchant or other purchaser of farm products is protected by the Food Security Act when the debtor sells secured farm products using a fictitious name that is neither registered nor listed in the UCC/EFS filing with the state.

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