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Friday, June 23, 2006

The Significance of the Cert. Grant in Watters

It has been a busy week for the Supreme Court, albeit a somewhat quiet one, given the cases left to be decided from the 2005 Term. [Next week will sure be interesting.]

One development on which I've seen very little coverage, though, is the grant of certiorari on Monday in Watters v. Wachovia Bank, No. 05-1342. Watters, a case from the Sixth Circuit, is one of three recent circuit decisions involving basically the same legal question -- the scope of the Office of the Comptroller of the Currency's (OCC's) authority to preempt state regulation of "operating subsidiaries" of national banks. Yeah, I know -- it's a mouthful. [The Second Circuit case is Burke v. Wachovia Bank; the Ninth Circuit case is Wells Fargo Bank v. Boutris.]

Anyway, in an earlier post, I described in some length the background and the issues presented in these three cases. Seriously -- it's good stuff. Go read it

What's noteworthy here is that, notwithstanding the unanimity of the circuits, all of which have similarly upheld the OCC's authority to preempt state consumer lending laws, and notwithstanding the unsurprisingly similar views of the Solicitor General, who filed an amicus brief at the Court's request supporting the denial of certiorari in Burke, the Second Circuit case, the Court granted certiorari anyway, albeit in one of the other cases raising the same question.

It is certainly true, as I noted in my earlier post, that it's long-past-time for the Court to clean up its agency preemption jurisprudence, and to reconcile seemingly irreconcilable (if not inscrutable) statements in Medtronic, Geier, and New York v. FERC, just to name a few cases (there are seven or eight more). Indeed, it just isn't clear, even to expert administrative law folk (and I sure as hell am not one of them), whether and to what extent agencies can preempt state law in areas in which their statutory authority is, for lack of a better word, marginal. For starters, how, if at all, would Chevron apply? Is an agency's authority to preempt necessarily coextensive with its authority to regulate? What role for congressional intent?

Don't get me wrong -- I'm extremely excited and pleased by the grant. After all, that was me, back in February, saying that " it might be nice for the Court to lend its imprimatur, one way or the other." [Thanks for listening, Supremes.] But two points bear noting: First, this is hardly a topic that admits of easy resolution -- we have no further than the earlier cases to look for proof of that. Agencies must have some preemptive authority, and so the question becomes where to draw the line, if not at the limit of their regulatory power...

Second, there is something very telling here: Given the absence of a conflict below, one can only assume that someone (or at least four someones, to be exact) sees something very, very wrong with where the law has gone here. After all, would the Court really grant on an administrative law/preemption issue on which the three circuits to reach the question are in unison just to affirm?

Look at it this way -- If nothing else, we here at Prawfs will have coverage of the OCC's preemptive authority under the National Bank Act and the regulations promulgated thereunder that is second-to-none in the blogosphere... that is, until someone besides me decides that this is interesting.

Posted by Steve Vladeck on June 23, 2006 at 03:29 AM in Constitutional thoughts, Current Affairs, Steve Vladeck | Permalink


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