In 2005, the Attorney General for New York began an investigation into lending practices by national banks in the State of New York and whether these practices violated New York’s fair-lending laws. As part of the investigation, the Attorney General (Eliot Spitzer) sent a letter to a number of national banks asking that they provide specific non-public information about their lending practices. These letters were sent “in lieu of subpoena.”
The Office of the Comptroller of the Currency (“OCC”) and a banking trade group, the Clearing House Association, brought suit to prevent the information request, on the basis that OCC’s regulations under the federal National Bank Act prohibited state law enforcement against national banks. Section 484(a) of the National Bank Act reads:
“No national bank shall be subject to any visitorial powers except as authorized by Federal law, vested in the courts of justice or such as shall be, or have been exercised or directed by Congress or by either House thereof or by any committee of Congress or of either House duly authorized.”
The OCC, charged with administering the National Bank Act adopted regulations further defining the term “visitorial powers.” The regulations stated in part that “(o)nly the OCC. . .may exercise visitorial powers with respect to national banks. . . . State officials may not exercise visitorial powers. . .such as conducting examinations, inspecting or requiring the production of books or records of national banks, or prosecuting enforcement actions.” (emphasis added).
The district court entered an injunction in favor of OCC and the Clearing House Association which prohibited an attorney general from enforcing state fair-lending laws through demands for records or judicial proceedings. The Second Circuit Court of Appeals affirmed. The Supreme Court affirmed in part and reversed in part.
The Court, in its opinion written by Justice Scalia, started its analysis by looking at prior decisions to help determine the “outer limits” of the term “visitorial powers,” noting that the Supreme Court has “always understood ‘visitation’ as [the] right to oversee corporate affairs, quite separate from the power to enforce the law.” For example, in First Nat. Bank in St. Louis v. Missouri, 263 U.S. 640 (1924), the Court upheld the right of the Attorney General of Missouri to bring a suit to enforce a state anti-bank-branching law against a national bank. In that case, the Court stated the federal government may perform visitorial administrative oversight, such as “inquir[ing] by quo warranto whether a national bank is acting in excess of its charter powers.” However, if it is a state statute of general applicability which is not substantively pre-empted, then the Court stated that “the power of enforcement must rest with the [State] and not with” the federal government. The Court went further to state that “reading ‘visitorial powers’ as limiting only sovereign oversight and supervision would produce an entirely commonplace result – the precise result contemplated by our opinion in St. Louis, which said that if a state statute is valid as to national banks, ‘the corollary that it obligatory and enforceable necessarily results.”
The Court noted that the OCC had tried to limit its regulation by noting in its argument that existing case law did recognize that states retained some power to regulate national banks, in areas such as contract, debt collection, taxation, zoning, criminal, and more. However, the Court noted that the language of OCC’s regulation was much more since it categorically prohibited “prosecuting enforcement actions” and defined visitorial powers to include “[e]nforcing compliance with any applicable. . .state laws concerning” “activities authorized or permitted pursuant to federal banking law.”
The Court concluded by applying the above-mentioned principles to the case. “Visitorial powers” in the National Bank Act:
“refers to a sovereign’s supervisory powers over corporations. They include any form of administrative oversight that allows a sovereign to inspect books and records on demand, even if the process is mediated by a court through prerogative writs or similar means.”
However, in this case the state attorney general was not acting in the “sovereign-as-supervisor” role, but instead was in the role “sovereign-as-law-enforcer.” This role is not a “visitorial power” and this, the OCC erred by extending the definition to include “prosecuting enforcement actions” in state courts.
The judgment of the Second Circuit was affirmed in part and reversed in part. The particular action by the Attorney General, the threatening letter “in lieu of subpoena,” is not an exercise of power of law enforcement “vested in the courts of justice” which the National Bank Act exempts from the ban on the exercise of supervisory power. The Court affirmed the injunction below as applied to the letter. More importantly, the Court vacated the injunction and reversed the lower courts decision that had prohibited the Attorney General from bringing a judicial enforcement action.
The decision can be found here.
A unanimous Supreme Court released its decision in Pleasant Grove City, Utah v. Summum, No. 07-665, yesterday. Justice Alito wrote the opinion, with five justices filing concurring opinions – Justice Stevens (joined by Justice Ginsburg), Justice Scalia (joined by Justice Thomas), Justice Breyer, and Justice Souter. The question before the Court was whether the Free Speech Clause of the First Amendment entitled a private group to insist that a municipality permit it to place a permanent monument in a city park in which other donated monuments, including a Ten Commandments monument, were previously erected and currently displayed. In brief, the Court held that the placement of a permanent monument in a public park was a form of government speech and was, therefore, not subject to scrutiny under the Free Speech Clause. Although parks were a traditional public forum for speeches and other transitory expressive acts, the display of a permanent monument in a public park was not a form of expression to which forum analysis applied.
The facts in the case were as follows. Pioneer Park in Pleasant Grove City contained a number of buildings, artifacts, and permanent displays, including the first City Hall and fire department buildings, a 9/11 memorial, and a Ten Commandments monument from the Fraternal Order of Eagles, donated in 1971. The City’s criteria for permanent displays in the park required that monuments be directly related to the City’s history, or be donated by a group with “long-standing ties to the . . . community.” Summum, a religious group, applied to have a monument of its Seven Aphorisms displayed, and advised that its proposed monument would be similar to the Ten Commandments monument already in the park. (The Summum religion includes the belief that, when Moses received stone tablets from God on Mount Sinai, he received two separate sets of tablets – the first was inscribed with the Seven Aphorisms; the second, later, tablet contained the Ten Commandments. Moses revealed the first tablet to only the few that were sufficiently spiritually mature, and received the Ten Commandments (something of a poor second) after he destroy the Aphorisms tablet.) After the City denied Summum’s request, citing its policy, Summum sued, alleging a violation of its free speech rights. (Summum argued, but abandoned, its Establishment Clause argument before the matter reached the appellate courts.)
The Tenth Circuit held that the park monuments constituted private, not government, speech, in a traditional public forum. Pleasant Grove City’s content-based choices and policy failed strict scrutiny review, and the City was ordered to accept the monument. A divided Tenth Circuit subsequently denied the City’s petition for a rehearing and rehearing en banc. The judges who dissented on the denial of rehearing (who would be referred to in the Supreme Court decision), pointed out that parks, as traditional public forums, had to be open to speeches, demonstrations, and other forms of transitory expression. The City, in this case, had not, “by word or deed, invite[d] private citizens to erect monuments of their own choosing in these parks. It follows that any messages conveyed by the monuments they have chosen to display are ‘government speech,’ and there is no ‘public forum’ for uninhibited private expression.”
Following the grant of certiorari, IMLA filed an amicus brief in support of the City, authored by Professor Mary Jean Dolan of the John Marshall Law School. The brief included a survey of existing monuments and placement policies in U.S. municipalities. In its opinion, the Supreme Court several times cited the IMLA brief.
Beginning its analysis, the U.S. Supreme Court noted that there were no prior decisions on the application of the Free Speech Clause to a government entity’s acceptance of privately donated, permanent monuments. First, the government had a right of expression, the “right to speak for itself.” While the Free Speech Clause restricted the government’s regulation of private speech, including speech in traditional public forums, it did not apply to the government’s own speech. Permanent monuments accepted by governments and placed on public property, despite the fact of being donated by private entities, “typically represent government speech.” Such displays were a traditional form of a government’s expression, and “throughout our Nation’s history, the general government practice with respect to donated monuments [was] one of selective receptivity,” demonstrated by way of design input, prior submission requirements, requests for modifications, and legislative approval for specific content. Pleasant Grove City, like other governments, took into account content-based factors like local history and culture. Thus, in making the decision to accept a permanent monument, the municipality was choosing its message.
The Court rejected Summum’s argument that something more definite or formal (e.g., passing a resolution) was needed before a government could be said to adopt a monument as its own expressive vehicle. “We see no reason for imposing a requirement of this sort,” adding that the City in this case took ownership of most of the monuments in the park. To require more would be a “pointless exercise that the Constitution does not mandate.” This would be unworkable for other reasons: a monument, even a text-based one, could easily convey more than one message. As demonstrated by the Statue of Liberty, the message intended by monument’s creator or donor could be different than that expressed by the government accepting the monument, and could change over time.
Public form analysis was “out of place” in addressing such displays. The installation of permanent monuments was not analogous to other forms of speech on government public property. Unlike demonstrating or leafleting, parks could only accommodate a finite number of permanent displays. The application of content-neutral time, place and manner restrictions was not feasible because the “obvious truth of the matter [was] that if public parks were considered to be traditional public forums for the purpose of erecting privately donated monuments, most parks would have little choice but to refuse all such donations.”
Justice Scalia and Justice Souter, in their concurring opinions, touched briefly on the “shadow” in this case, the Establishment Clause. Justice Scalia, referring to the Court’s earlier ruling in Van Orden v. Perry, 545 U. S. 677 (2005) (Ten Commandments monuments had an “undeniable historical meaning”) added that the city here need “not fear that today’s victory has propelled it from the Free Speech Clause frying pan into the Establishment Clause fire. Contrary to respondent’s intimations, there are very good reasons to be confident that the park displays do not violate any part of the First Amendment.” Justice Souter, taking a broader look, indicated that if a monument had “some religious character, the specter of violating the Establishment Clause” would require the city “to take care to avoid the appearance of a flat-out establishment of religion, in the sense of the government’s adoption of the tenets expressed or symbolized.” However, it was “simply unclear how the relatively new category of government speech [would] relate to the more traditional categories of Establishment Clause analysis, and this case [was] not an occasion to speculate.”
Justices Stevens and Breyer also echoed the need for municipalities to be careful. Justice Stevens indicated the decision was not a “free license” for a government to “communicate offensive or partisan messages”; Justice Breyer likewise indicated that the “government speech” doctrine would not permit a city to “discriminate in the selection of permanent monuments on grounds unrelated to the display’s theme, say solely on political grounds.”
A copy of the opinion is available online at http://www.supremecourtus.gov/opinions/08pdf/07-665.pdf
IMLA thanks all of the participants in the survey done as part of our brief, and thanks Professor Dolan for her excellent brief.
Professor Dolan will be speaking at the upcoming IMLA Mid-Year Seminar about this case.
Posted by: Warren Kraft, Assistant City Attorney/’HR Director, West Bend, Wisconsin
The column’s headline, from the current issue of Phi Alpha Delta’s “The Reporter” jumps out at me – “What Will Be Your Legacy?” It is a question that we pose to adult scout leaders who participate in an advance leadership training course. The question formed the basis for a reflective conversation with a friend as my one year “retirement” anniversary from the Oshkosh WI city attorney’s office came and went.
In his column about the Municipal Attorney List-serv, Dallas assistant city attorney Don Knight chronicled my personal and professional journeys. As part of the changing political winds in that community, I found myself the target of several unflattering columns by the local newspaper’s executive editor. And so, I was moved out, and I moved on. One of my former co-workers summarized my year of change by saying that while the door to Oshkosh city hall closed behind me that fateful October 2007 day, so many other, just-as-rewarding doors opened up to me. Meanwhile, the executive editor still writes his weekly columns criticial of local government officials, even those council members that his newspaper endorsed for election.
As collegiate journalism students in the early 1970s, we were taught to maintain scrapbooks of our published efforts that we wanted future employers to consider with our applications. I may still have a few of them stashed in the back of the garage attic unless the mice used portions for nesting materials.
So, I wondered to my reflective friend what would my scrapbook look like from these past 12 or so months, compared to what the executive editor could put into his. Though I left the public sector, my “retirement” was anything but private. Whereas his published works would show the same monotonous themes, what would I be able to show my grandchildren?
It would surely include a local newspaper clipping (yes, from THAT local newspaper) of a picture from last summer. One of “my” scouts standing arm in arm with me in the Bridger-Teton National Forest, outside Jackson WY, as part of a national scouting service project to build hiking and biking trails for the US Forest Service. Perhaps, a few scenes from lifeguard instructional classes at the local YMCA last spring, or the swim meets that I continue to annouce. Maybe some of the pictures when “we” installed a new pastor at a church I was assisting. Even a few choice phrases from some of the associates at the Madison WI law firm, where I am now “of counsel” after a summer fulltime stint so I can work fulltime in the public sector again in another community.
Rhona Hill, International Justice of Phi Alpha Delta, asked in her column what positive impact P.A.D. members would have in each stage of their lives as they closed one chapter and moved to the next. She writes about three fundamental principles, that are “indispensible ingredients of the character of the true lawyer.”
“INTEGRITY. Adherence to moral principl and character; honesty, honoor in one’s beliefs and actions. (her emphasis)
“COMPASSION. Deep sympathy and sorrow for another who is stricken by suffering or misfortune, accompanied by a stong desire to alleviate the pain or move its cuase.
“COURAGE. The quiality of mind or spirit that enable us to face difficulty, danger and pain, with firmness and without fear.”
Aren’t these some of the attributes that we seek in our friendships, in our personal relationships?
Bill Kearns moderates the Municipal Attorney Water Cooler using rules of conduct embodied in three words: civility, collegiality and courtesy. You can see those attributes played out as we support each other through personal and professional challenges, as friends sharing a common bond.
Would we need standing committees in our bar associations focused solely on encouraging our colleagues to practice these principles?
We teach our scouts “Leave No Trace” principles, in effect, leave the place in better condition than when you found it. Sometime our efforts fall a bit short, but we keep encouraging positive impacts.
IMLA names several of its more significant recognitions, awarded to deserving and oftentimes humbled municipal attorneys, after venerable people. Those individuals, who themselves, leading by principle, attribute and example, form our legacy of public service and commitment. Log in to the Municipal Attorney List and the Water Cooler to witness the continuation of those who have gone before us.
Surely every walk of life has its lunkerheads, but, at a time of the calendar when many people ponder the past, the present and the future, perhaps the operative question for each of us is:
What is in YOUR scrapbook?
Today the US Supreme Court will hear arguments in the case of Pleasant Grove City v. Summum. The issue before the court involves whether a city may accept the donation of a monument and place it in a public park without creating a “public forum” that then requires it to place monuments in the park that express differing viewpoints. In other words, will acceptance and placement of a donated monument become government speech or does the monument retain its character as private speech?
IMLA is proud to be the only national organization representing governments to have filed an amicus brief in this case. We hope you read it. Our pro bono author, Mary Jean Dolan wove a masterful argument together to present what we believe is persuasive advocacy in favor of government speech. In terms of governmental briefs, however, IMLA is not alone. There are several. Two deserve particular attention, as they illustrate the potential damaging effect the Tenth Circuit’s decision will have on governments if adopted by the Court. The City of New York in a wonderfully written argument presents a history of its regulation of its parks and their design that includes a discussion of how it decides when and where it will accept and place monuments. The Solicitor General, describes the extent and breadth of the National Park system and how it would be affected should the Court adopt the erroneous reasoning of the Tenth Circuit.
Although a monument to the Ten Commandments provided the genesis for this case, the case is not about religion, its establishment or its expression; it is about whether a governmental entity that puts signs on its lampposts celebrating city events thereby creates a public forum that now requires it to use its lampposts for others’ messages. It is about whether a city that decides to honor an important historical event or figure by accepting monuments and placing them in public places has thereby turned those public places into public forums that require it to accept other monuments and place them regardless of viewpoint. This country accepted and placed one of its greatest icons through a private donation – the Statue of Liberty. Must we match tributes to “liberty” with statues of tyrants?
While this case is not about religion, you would not know it by looking at the list of amici and the authors of some of the amicus briefs. Take a look at some of the arguments. How should the court decide this case? From IMLA’s perspective the court ought to recognize that when the government speaks, it does not create a public forum requiring it to express other points of view. Similarly, the simple act of accepting a monument for placement and display does not necessarily create a public forum, but constitutes government speech. This does not mean that government speech cannot run afoul of the Constitution. Indeed, the Constitution acts to limit government speech if it were to go so far as to advocate a religious viewpoint – but that is not a question posed in this case. For an interesting read on the development of the religion clauses in the First Amendment take a look at Founding Faith by Steven Waldman.
Charles Rhyne, in addition to his many other accomplishments, was one of the great advocates of his time. Among his wins before the Supreme Court were “Baker v. Carr” and “National League of Cities v. Usery”. While the latter is now lost to judicial mind-changing, the former stands as testament to his advocacy and stands as one of the most important cases in American jurisprudence. Not long before his death, Mr. Rhyne agreed to speak to the Office of County Attorney in Montgomery County, Maryland about advocacy. You should also take special note of a young Chuck Thompson (our Executive Director). That presentation was taped. As we unveil our blog, IMLA is proud to make this video part of our first posting and available as an enduring tribute to Mr. Rhyne and an excellent resource for lawyers who wish to become successful advocates.