Background

• Parks received MBNA credit via convenience checks in 2003 and used them for purchases and bills, incurring finance charges.
• The convenience checks did not carry disclosures required by California Civil Code 1748.9.
• Parks sued MBNA in 2004 for unlawful business practices under Cal. Bus. & Prof. Code §17200 et seq. on disclosure grounds.
• MBNA relied on the National Bank Act (NBA) and former 12 C.F.R. § 7.4008(d) to claim preemption of 1748.9.
• The trial court granted MBNA’s motion; the Court of Appeal reversed, and the matter was taken up by the California Supreme Court.
• The Supreme Court held that the NBA preempts 1748.9, and remanded for further proceedings consistent with this holding.

Issues

Key Cases Cited

• Franklin Nat. Bank of Franklin Square v. New York, 347 U.S. 373 (U.S. 1954) (incidental powers not to be narrowly construed; advertising case under NBA)
• Barnett Bank of Marion County, N.A. v. Nelson, 517 U.S. 25 (U.S. 1996) (preemption where federal grant of powers is broad and not subject to local restriction)
• Watters v. Wachovia Bank, N.A., 550 U.S. 1 (U.S. 2007) (operating subsidiaries and state regulation preemption when it substantially interferes with banking powers)
• Fidelity Fed. Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141 (U.S. 1982) (federal preemption of state restrictions on federally authorized banking powers even if nondiscriminatory)
• Perdue v. Crocker National Bank, 38 Cal.3d 913 (Cal. 1985) (state law of general applicability vs. preemption of banking-specific measures)
• Anderson National Bank v. Luckett, 321 U.S. 233 (U.S. 1944) (state law that does not significantly impair banking powers may survive preemption)
• Viva! International Voice for Animals v. Adidas Promotional Retail Operations, Inc., 41 Cal.4th 929 (Cal. 2007) (four preemption theories and obstacle foreshadowing framework)