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U.S. Supreme Court

Bankamerica Corp. v. United States, 462 U.S. 122 (1983)

Bankamerica Corp. v. United States

No. 81-1487

Argued January 19, 1983

Decided June 8, 1983

462 U.S. 122


The fourth paragraph of § 8 of the Clayton Act provides that

"[n]o person at the same time shall be a director in any two or more corporations, any one of which has capital, surplus, and undivided profits aggregating more than $1,000,000, engaged in whole or in part in commerce, other than banks, banking associations, trust companies, and common carriers,"

if such corporations are competitors. The United States brought test cases, consolidated in Federal District Court, against petitioners, certain banks, bank holding companies, mutual life insurance companies, and individuals who each served on the board of directors of one of the banks or bank holding companies and one of the insurance companies. It was stipulated that the interlocked banks and insurance companies compete in the interstate market for mortgage and real estate loans. The Government asserted that the interlocking directorates violated the fourth paragraph of § 8, arguing that the "other than banks" clause simply prevented overlapping regulation of interlocks between banks, which are separately regulated in the first three paragraphs of § 8. The District Court entered summary judgment for petitioners, holding that the statutory proscription applies only to two corporations, neither of which is a bank. The Court of Appeals reversed.

Held: The fourth paragraph of § 8 does not bar interlocking directorates between a bank and a competing insurance company. Pp. 462 U. S. 126-140.

(a) The most natural reading of the language of the statute is that the interlocked corporations must all be corporations "other than banks," and that thus the fourth paragraph of § 8 does not, by its express terms, prohibit interlocking directorates between a bank and a competing nonbanking corporation. This reading of the statute is reinforced both by the structure of the Clayton Act and by the structure of the fourth paragraph of § 8. Pp. 462 U. S. 128-130.

(b) Great weight is to be given to the contemporaneous interpretation of a challenged statute by an agency charged with its enforcement, but, for over 60 years prior to its present interpretation of § 8, the Government made no attempt to apply the statute to interlocks between banks and insurance companies, even though such interlocks were widespread and a matter of public record throughout the period. Mere failure of administrative agencies to act is in no sense a binding administrative

Page 462 U. S. 123

interpretation that the Government lacks the authority to act, but, in the circumstances of this case, the Government's failure for over 60 years to exercise the power it now claims strongly suggests that it did not read § 8 as granting such power. Moreover, the business community directly affected, the enforcing agencies, and the Congress all have read the statute the same way for 60 years, thus strongly supporting the conclusion that Congress intended § 8 to be interpreted according to its plain meaning. Pp. 462 U. S. 130-133.

(c) If any doubt remains as to the meaning of the statute, that doubt is removed by the legislative history. The evolution of the bill, along with the remarks in committee and on the floor, rebuts the Government's claim that Congress intended to reach bank-nonbank interlocks in the fourth paragraph of § 8. Pp. 462 U. S. 133-140.

656 F.2d 428, reversed.

BURGER, C.J.,delivered the opinion of the Court, in which BLACKMUN, REHNQUIST, STEVENS, and O'CONNOR, JJ., joined. WHITE, J., filed a dissenting opinion, in which BRENNAN and MARSHALL, JJ., joined, post, p. 462 U. S. 140. POWELL, J., took no part in the decision of the case.

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