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U.S. Supreme Court

Lewis v. Continental Bank Corp., 494 U.S. 472 (1990)

Lewis v. Continental Bank Corp.

No. 87-1955

Argued November 28, 1989

Decided March 5, 1990

494 U.S. 472


Before 1987, the Bank Holding Company Act of 1956 (BHCA) allowed States to prohibit an out-of-state bank holding company from owning an in-state "bank," which was defined to include an institution that both accepted demand deposits and engaged in the commercial lending business. In 1981, appellee, an Illinois bank holding company, applied to Florida to establish and operate an "industrial savings bank" (ISB) in that State, averring that "all deposit relationships" would be insured "to the maximum extent allowed by the Federal Deposit Insurance Corporation" (FDIC). Appellant Lewis, the State Comptroller, refused to process the application on the ground that two state statutes prohibited out-of-state holding companies from operating ISBs in Florida. Appellee then filed a suit claiming that the state statutes violated the Commerce Clause, and the District Court granted summary judgment in its favor, ordering Lewis to process the application. The court subsequently denied without explanation appellee's motion for attorney's fees under 42 U.S.C. § 1988. In 1987, shortly before the Court of Appeals affirmed on the merits and remanded for an explanation of why the attorney's fees claim had been denied, amendments to the BHCA expanded the definition of "bank" to include all banks whose deposits are insured by the FDIC. Lewis then filed a petition for rehearing in the Court of Appeals, arguing that the new legislation mooted the controversy because, since appellee's proposed ISB would have FDIC-insured deposits, the refusal to process the application was authorized by federal law, and hence immune from Commerce Clause challenge. The court denied the petition, awarded appellee attorney's fees for the appeal, and remanded for the District Court to calculate the amount of that award and to determine whether an award was appropriate for work done in the District Court.


1. The case has been rendered moot by the 1987 BHCA amendments. The only evidence in the record of appellee's stake in the case's outcome

Page 494 U. S. 473

is its application to establish and operate an FDIC-insured ISB, which stake was eliminated by the amendments. The application constitutes no evidence that appellee intended to establish an uninsured bank, since "insured by the FDIC to the maximum extent allowed" envisions FDIC insurance. There is no merit to appellee's argument that its suit nevertheless remains justiciable because its dispute with Florida is "capable of repetition, yet evading review." Since Florida's allegedly unconstitutional action is no longer unconstitutional with respect to insured ISBs, there is no reasonable expectation that appellee will suffer the same wrong again. Moreover, the State's refusal to issue a bank charter is not the sort of action which, by reason of the inherently short duration of the opportunity for remedy, is likely to evade review. See Los Angeles v. Lyons, 461 U. S. 95, 461 U. S. 109. Pp. 494 U. S. 477-482.

2. Appellee's postargument, ex parte affidavit averring its interest in opening, and explaining its failure to file an updated application for, an uninsured ISB will not be evaluated by this Court in the first instance. Since, however, the case's mootness is attributable to a change in the governing legal framework, and since appellee may have a residual claim, which understandably was not asserted previously, that it intended to apply for an uninsured ISB not covered by the new framework, the case is remanded for consideration of such materials as the parties may submit to supplement the record. See Diffenderfer v. Central Baptist Church of Miami, Inc., 404 U. S. 412, 404 U. S. 415. 494 U. S. 482-483.

3. Because the event that mooted the controversy occurred before the Court of Appeals' judgment, appellee was not, at the appeal stage, a "prevailing party" entitled to recover attorney's fees under § 1988. See Rhodes v. Stewart, 488 U. S. 1, 488 U. S. 3-4. Whether appellee can be deemed a "prevailing party" in the District Court, and whether § 1988 fees are available in a Commerce Clause challenge, must be resolved by the courts below in the first instance. P. 494 U. S. 483.

827 F.2d 1517 and 838 F.2d 457, vacated and remanded.

SCALIA, J., delivered the opinion for a unanimous Court.

Page 494 U. S. 474

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