WACHOVIA BANK, NATIONAL ASSOCIATION, Plaintiff-Appellant, v. Daniel G. SCHMIDT III; Priag LLC; DGS Investments, INC., Defendants-Appellees.
No. 03-2061.
United States Court of Appeals, Fourth Circuit.
Decided: Nov. 1, 2004.
388 F.3d 414
Second, the AFGE relies on Department of Defense internal accounting rules that separately categorize cash by source: operations, investments, and appropriations. But regulations or rules promulgated by the Executive on its own cannot affect the character of an agency‘s funds. The purpose of the Constitution‘s Appropriations Clause is to constrain the Executive and assure Congress’ control over expenditures. Congress may choose to relinquish its appropriations authority in specific instances by establishing NAFIs or continuing appropriations, but that is the choice of Congress. Here, Congress has chosen not to give up appropriations authority over the defense working-capital funds. To say that the Defense Department can, on its own, carve out an area of nonappropriated funding would create an Executive prerogative that offends the Appropriations Clause and affects the constitutional balance of powers. This we decline to do.
Accordingly, we believe that the FLRA‘s decision that the TYAD AWCF consists of appropriated funds was correct, albeit on reasoning somewhat different than that adopted by the Authority.6 The petition for review will be denied.
Argued: June 3, 2004.
Before LUTTIG and KING, Circuit Judges, and Robert R. BEEZER, Senior Circuit Judge of the United States Court of Appeals for the Ninth Circuit, sitting by designation.
Vacated and remanded by published opinion. Judge LUTTIG wrote the opinion, in which Senior Judge BEEZER joined. Judge KING wrote a dissenting opinion.
OPINION
LUTTIG, Circuit Judge:
Appellant Wachovia Bank, a national banking association with its principal place of business in North Carolina, appeals from the district court‘s denial of its petition to compel arbitration of claims that appellee Daniel G. Schmidt III brought against Wachovia in state court. On appeal, Schmidt argues for the first time that the district court lacked diversity jurisdiction to entertain Wachovia‘s petition because Wachovia operates branch offices in South Carolina, the state of which Schmidt is a resident. We must therefore decide whether a national banking association is, within the meaning of
I.
Appellant Wachovia Bank (“Wachovia“) is a national banking association with its principal place of business in Charlotte, North Carolina. Appellant‘s Supp. Br. at
On April 10, 2003, Schmidt and other plaintiffs filed a complaint in South Carolina state court, naming Wachovia and others as defendants. J.A. 117. The complaint alleged, inter alia, that the defendants fraudulently induced the plaintiffs to engage in a risky tax-motivated investment scheme. J.A. 146-48. On June 18, Wachovia filed a petition in the United States District Court in South Carolina seeking an order compelling arbitration and a motion to compel arbitration of the state claims, naming Schmidt and related business entities as defendants. J.A. 113. As the sole basis of jurisdiction, Wachovia‘s petition invoked the diversity jurisdiction of the district court under
The district court denied Wachovia‘s petition and motion, without addressing its subject matter jurisdiction, J.A. 380-90, and Wachovia appealed. For the first time, Schmidt argues before us that diversity is lacking because Wachovia is “located” in South Carolina, within the meaning of
II.
The district courts shall have original jurisdiction of any civil action commenced by the United States, or by direction of any officer thereof, against any national banking association, any civil action to wind up the affairs of any such association, and any action by a banking association established in the district for which the court is held, under chapter 2 of Title 12, to enjoin the Comptroller of the Currency, or any receiver acting under his direction, as provided by such chapter.
All national banking associations shall, for the purposes of all other actions by or against them, be deemed citizens of the States in which they are respectively located.
Schmidt contends that Wachovia, which operates branch offices in South Carolina, is “located” in that state, and that the district court therefore lacked jurisdiction. We agree. Three traditional tools of statutory interpretation in combination—the ordinary meaning of “located,” its use in juxtaposition with the contrasting term “established” in the immediately preceding sentence in section 1348, and the Supreme Court‘s construction of “located” in a parallel venue statute in Citizens and Southern National Bank v. Bougas, 434 U.S. 35, 98 S.Ct. 88, 54 L.Ed.2d 218 (1977)—confirm that “located” should be construed so as to render banking associations citizens of the states in which they operate branch offices.
A.
It is an axiom of statutory interpretation that the plain meaning of an unambiguous statute governs, barring exceptional circumstances. See, e.g., Rubin v. United States, 449 U.S. 424, 430, 101 S.Ct. 698, 66 L.Ed.2d 633 (1981). Where, as here, the statute does not provide an express definition for the term in question, “we construe [the] statutory term in accordance with its ordinary or natural meaning.” FDIC v. Meyer, 510 U.S. 471, 476, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994).
In ordinary parlance, the word “located” is a general term referring to physical presence in a place. See, e.g., Webster‘s Third New International Dictionary 1327 (1993) (defining “locate” as “to set or es-
It is indisputable that a national banking association becomes physically present in a state when it opens branch offices in that state and conducts business there. See, e.g.,
The Seventh Circuit has come to a contrary conclusion, holding that “located” in section 1348 refers only to a bank‘s principal office and the office listed in its organization certificate. See Firstar Bank v. Faul, 253 F.3d 982, 993-94 (7th Cir. 2001); see also Horton v. Bank One, 387 F.3d 426, 2004 WL 2224867 (5th Cir.2004) (adopting the same result on similar reasoning). While the Seventh Circuit‘s holding rests largely upon a purposive, historical analysis of the statute, which we address below, see infra, it also suggests that the word “located” is ambiguous as between any physical presence and a single, unique physical presence. See id. at 987 (“[W]hat we are trying to determine is the number or scope of places where a national bank is fixed or established. Some definitions do suggest that ‘locate’ refers to a particular or specific location.“). But this supposed ambiguity is not found in the ordinary meaning of “located.” Although the definitions cited by the Seventh Circuit (and us) do refer to a “particular or specific location,” see id. (quoting Webster‘s Third at 1327), they do
In light of these definitions, the dissent‘s conclusion that the word “located” is ambiguous is puzzling. In maintaining that the term “located” is ambiguous, the dissent cites four definitions, all of which establish that “located” refers to a specific place or position. See post at 434 & n.2 (citing definitions that define “located” in terms of “specific place or position,” “a particular spot or position,” “site or place,” and “fix or establish in a place“). But the dissent plainly does not attempt to defend the erroneous inference that the Seventh Circuit drew, namely that the specificity of the position connoted by “located” implies uniqueness of that position; the dissent openly concedes that the word “located” could encompass multiple branch offices in multiple states. See post at 434 (“In this proceeding, ‘located’ could refer ... to any state in which Wachovia has established branch offices.“). Thus, every definition the dissent cites supports our conclusion that the word “located” unambiguously includes branch offices, because branch offices plainly have a “specific place or position,” are clearly located in a “particular spot or position,” and are certainly “fixed or established in a site or place.” See post at 434 & n.2. Because the dissent cites only definitions that clearly support our interpretation of the word “located,” we are at a loss as to how to address its entirely unsupported conclusion that the word is ambiguous with respect to branch offices.
B.
The Supreme Court‘s decision in Citizens and Southern National Bank v. Bougas, 434 U.S. 35, 98 S.Ct. 88, 54 L.Ed.2d 218 (1977), gives authoritative support to our reliance on the ordinary meaning of “located” in section 1348. In Bougas, the Supreme Court interpreted “located” in the former venue statute for national banking associations to include branch offices. Id. at 37, 98 S.Ct. 88. Bougas must control our interpretation of “located” in the parallel jurisdiction statute for national banks for two reasons: first, in a statutory context almost identical to section 1348, the Bougas Court applied the canon that different statutory terms in the same section (as those appearing in section 1348, see discussion infra) should be given different meanings; and second, the venue and jurisdiction statutes should be treated as in pari materia, so that the Supreme Court‘s construction of a term in one statute must control the meaning of the identical term in the other.
i.
It is a principle of statutory interpretation that different words used in the same statute should be assigned different
Section 1348 uses two distinct terms to refer to the presence of a banking association: “established” and “located.” The first sentence grants the district courts jurisdiction over “any action by a banking association established in the district for which the court is held” to enjoin the Comptroller of the Currency or his receiver under chapter 2 of title 12.
These distinct terms can be given distinct meanings, because a national bank can have two different kinds of presence. First, a bank can have the generic physical presence of operating an office in a state or district. Second, every national banking association is required to designate in its organizational certificate “[t]he place where its operations of discount and deposit are to be carried on.”
To give independent meaning to the distinct terms in section 1348, it is most reasonable to understand the place where a national bank is “established” to refer to a bank‘s charter location, and to understand the place where it is “located” to refer to the place or places where it has a physical presence. This interpretation accords not only with the ordinary meaning of “located,” which refers to physical presence in general terms, see supra, but also with the ordinary meaning of “established,” which connotes specifically an original and permanent location. See, e.g., Webster‘s Third at 778 (defining “establish” as “to place, install, or set up in a permanent or relatively enduring position esp. as regards living quarters, business, social life, or possession,” or “to bring into existence, create, make, start, originate, found, or build usu[ally] as permanent or with permanence in view” (emphases added)). A national bank is originally and permanently established at its main office, which cannot be moved more than thirty miles outside the city of its original location, and even then only with approval of two-thirds of the shareholders and the Comptroller of the Currency. See
In Citizens and S. Nat‘l Bank v. Bougas, 434 U.S. 35, 98 S.Ct. 88, 54 L.Ed.2d 218 (1977), the Supreme Court attributed the same two definitions to “established” and “located” in the former venue statute for national banks. The prior version of
Actions and proceedings against any association under this chapter may be had in any district or Territorial court of the
United States held within the district in which such association may be established, or in any State, county, or municipal court in the county or city in which said association is located having jurisdiction in similar cases.
Bougas, 434 U.S. at 35-36, 98 S.Ct. 88 (emphasis added) (quoting Rev. Stat. § 5198, as amended by Act of Feb. 18, 1875, ch. 80, § 1, 18 Stat. 316, 320). The Court noted that the lower courts had reached no consensus on the meaning of “located,” but had unanimously concluded that “established” referred to a bank‘s charter location. See Bougas, 434 U.S. at 39, 98 S.Ct. 88 (“The lower federal courts appear to be unanimous in holding that a national bank ... is ‘established’ only in the federal district that encompasses the place specified in the bank‘s charter.“); see also, e.g., Leonardi v. Chase Nat‘l Bank, 81 F.2d 19, 22 (2d Cir.1936), cert. denied, 298 U.S. 677, 56 S.Ct. 941, 80 L.Ed. 1398 (1936) (“[T]he district in which the national bank has its principal place of business and which contains the place recited in its charter ... should be taken as the proper district for suits against a national bank.“). The Court determined that “located,” used in close conjunction with “established” in the same statute, must be given a different meaning: “The two words are different.... Whatever the reason behind the distinction in the words, it does exist, and we recognize it.” Bougas, 434 U.S. at 44, 98 S.Ct. 88. The Court concluded that a national bank was “located” in any county where it operated a branch office. Id. at 38, 98 S.Ct. 88.
The principle that different terms conjunctively used in the same statute should be given different meanings is identically applicable here. Indeed, section 1348 includes the very same words “established” and “located,” used in similarly close proximity and in a highly similar context, as did the former version of
Acknowledging this principle of interpretation, the Seventh Circuit argued that the two words in section 1348, “established” and “located,” could be given different meanings by construing the place where a bank is “established” to refer to a bank‘s charter location, and the place where it is “located” to refer to a bank‘s principal place of business—though the two are almost invariably identical. See Firstar Bank, 253 F.3d at 992, 994 n. 6. Here, Wachovia makes the related observation that branch banking was not permitted for national banks until the McFadden Act of 1927. See Act of Feb. 25, 1927, ch. 191, § 7, 44 Stat. 1224, 1228; see also Act of June 16, 1933, ch. 89, § 23, 48 Stat. 162, 189-90 (“the 1933 statute“) (permitting national bank branches in places other than the charter location); Bougas, 434 U.S. at 43, 98 S.Ct. 88 (noting that the McFadden Act only permitted national bank branches in the same city as the charter location, and that “[i]t was not until 1933 that Congress approved, upon specified conditions, national bank branches beyond the place named in the charter“). Thus, Wachovia argues, at the time of the 1887 Act‘s enactment, “located” could only refer to the principal office of a bank, which was always identical to the charter location. See Appellant‘s Supp. Br. at 3.
In sum, if Congress wishes to specify principal place of business and thereby exclude branch locations, it can easily do so. And in fact it has done so elsewhere. See, e.g.,
Wachovia‘s closely related historical argument is likewise unavailing. Wachovia suggests that, because “located” in the 1887 Act could refer only to a bank‘s principal office prior to the advent of branch banking in 1927, “located” in section 1348 likewise must be read to refer only to a bank‘s principal office. See Appellant‘s Supp. Br. at 5. The Supreme Court was unpersuaded in Bougas by a similar argument regarding the venue statute, see Bougas, 434 U.S. at 43, 98 S.Ct. 88, and we agree that this logic must be rejected here as well. Under traditional tools of interpretation, the statutory history that Wachovia describes actually supports the opposite conclusion: Congress’ readoption of the general term “located” in 1948, after it became possible for national banks to locate to other states through branch offices, confirms that Congress did not intend to restrict the term to a bank‘s principal place of business. In 1927, it first became possible (in ordinary parlance) for a national bank to be “located” in a place either through its principal office or through its branch offices. Congress was aware of this change, having effected the change itself. Because, in reenacting section 1348, Congress did not specify “principal” or “branch” location, but instead retained the general term “located,” history reveals, if anything, that Congress did not intend to restrict the meaning of “located” beyond its meaning in ordinary parlance and did intend to bring branch offices within the scope of the section.
Therefore, the words “established” and “located” should be given distinct meanings in section 1348. As the Supreme Court acknowledged in Bougas, “established” most naturally refers to charter location, while “located” most naturally refers to the site of any office. Bougas, 434 U.S. at 44, 98 S.Ct. 88.
ii.
The Supreme Court‘s interpretation of “located” in Bougas controls the meaning
In Bougas, the Supreme Court held that the word “located” in the version of the federal venue statute then in effect referred to branch locations. See Bougas, 434 U.S. at 45, 98 S.Ct. 88. The version of the venue statute interpreted in Bougas was enacted in 1875, and was thus in effect when section 1348 was enacted in 1948. See Act of Feb. 18, 1875, ch. 80, § 1, 18 Stat. 320. As described above, section 1348 reflected the terminology of the venue statute by using both “established” and “located” to refer to the presence of national banks. See supra. Section 1348, the jurisdictional statute, thus adopted precisely the same vocabulary to describe banks’ presence as did the then-existing venue statute.
Statutes that are in pari materia or relating to the same subject matter are to be interpreted in light of, and consistently with, one another. United States v. Stewart, 311 U.S. 60, 64, 61 S.Ct. 102, 85 L.Ed. 40 (1940) (“[A]ll acts in pari materia are to be taken together, as if they were one law.“). This interpretive principle is especially applicable when the two statutes adopt a single consistent vocabulary in reference to the same subject mat-
In refusing to apply the in pari materia canon, the Seventh Circuit maintained that section 1348 and the former
In fashion similar to that of the Seventh Circuit, the dissent urges that the in pari materia canon should not apply because there are “significant meaningful distinctions” between the doctrine of venue and the provision for diversity jurisdiction. Post at 438. But in what amounts to a full concession of the applicability of the canon, the dissent admits that the relevant sub-ject matters of the venue and diversity jurisdiction statutes are identical: as the dissent frankly acknowledges both “concern whether a national bank may initiate suit or be sued in federal court.” Id. The further observation made by the dissent that venue serves litigants’ convenience while diversity jurisdiction is concerned with bias does not defeat the application of the canon. To permit it to do so would be to insist upon far too specific a congruity of purpose; no two statutes would ever be sufficiently similar to warrant application of the canon. And courts have never insisted on such absolute identity of purpose. See, e.g., Simpson v. Union Oil Co., 377 U.S. 13, 24, 84 S.Ct. 1051, 12 L.Ed.2d 98 (1964) (patent law and antitrust law are in pari materia); Am. Cyanamid Co. v. FTC, 363 F.2d 757, (6th Cir.1966) (“The Federal Trade Commission Act may be construed in pari materia with the Sherman and Clayton Acts.“); Hallenbeck v. Penn. Mut. Life Ins. Co., 323 F.2d 566, 571 (4th Cir.1963) (“It is well established that statutes which relate to the same persons or things, or the same class of persons or things, or have a common purpose may be regarded as ‘in pari materia.‘” (emphasis added)). Indeed, the very treatise that the dissent cites summarizes the criteria for applying the canon this way: “The guiding principle ... is that if it is natural and reasonable to think that the understanding of members of the legislature or persons to be affected by a statute, be influenced by another statute, then a court called upon to construe the act in question should also allow its understanding to be similarly influenced.” 2B Sutherland‘s Statutory Construction § 51.03, at 212. Here, of course, not only is it eminently “natural and reasonable” to think that Congress, in describing the presence of national banking associations to determine their capacity to sue and be sued in federal courts,
Even if the two statutes are not treated as in pari materia, the meanings of “established” and “located” in the venue statute still provide highly persuasive evidence of the meanings of the same terms in the jurisdiction statute. Identical words, even occurring in unrelated statutes, should be interpreted to have identical meanings whenever reasonably possible. See, e.g., Overstreet v. North Shore Corp., 318 U.S. 125, 129-30, 63 S.Ct. 494, 87 L.Ed. 656 (1943) (construing the phrase “engaged in commerce” in the Fair Labor Standards Act in light of existing constructions of the same phrase in the Federal Employers’ Liability Act, without describing the two statutes as in pari materia); Link v. City of Shelton, 186 Conn. 623, 443 A.2d 902, 904 (1982) (construing the phrase “in the course of his duty” in the statute in question in light of the same phrase in the “unrelated” workers’ compensation statute); see generally 2B Sutherland‘s Statutory Construction § 53:03, at 327-31.
Furthermore, even if we were to ignore Bougas and to adopt the dissent‘s suggestion that the diversity jurisdiction statute be interpreted in light of its “historical purpose,” namely preventing bias against out-of-state parties, there is no reason to believe that this purpose would lead us to adopt the dissent‘s construction of section 1348. On the contrary, there is not a shred of evidence that Congress, in enacting section 1348, was concerned with shielding national banks from potential bias in the courts of the states where they operate branch offices. The only evidence that the dissent even offers is the fact that Congress, in
In short, even if we were to ignore the Supreme Court‘s construction of “located” and “established” in Bougas, the “rationale underlying the concept of diversity jurisdiction” would still provide no warrant to adopt the dissent‘s position. The notion that Congress believed that national banks that actively conduct business in a state cannot get a fair adjudication of state-law claims in that state‘s courts is rank speculation, as even the dissent would have to acknowledge. In fact, if one were to engage in surmise, it would be just as defensible to conclude that Congress believed it entirely reasonable in such circumstances to deny national banking associations resort to the federal courts, over the courts of the states in which the banks have chosen to locate branch offices; for it might have appeared unseemly to permit the national banks to seek and receive the trust and business of a state‘s citizens, but at the same time to permit them to refuse, out of distrust of those citizen-customers, to subject themselves to the courts created by those citizens to protect their rights against those who seek, receive, and
III.
Despite the ordinary meaning of section 1348 and its obvious analog in the venue statute interpreted in Bougas, Wachovia persists that “located” is nevertheless ambiguous. See Appellant‘s Supp. Br. at 1 (“[T]he word ‘located’ lacks any plain or unambiguous meaning when applied to the activities of national banks.“); see also Bougas, 434 U.S. at 44, 98 S.Ct. 88 (“There is no enduring rigidity about the word ‘located.‘“). Wachovia argues that “located” in section 1348 must be interpreted to incorporate the settled background understanding of the term. See Appellant‘s Supp. Br. at 3; see also Firstar Bank, 253 F.3d at 988.
As an initial matter, we do not believe that the term “located” in section 1348 is ambiguous between “physically present,” and “principal place of business” or “principally physically present.” We think the word simply means “physically present,” especially in light of the Supreme Court‘s definitive construction of the former
A.
First, Congress did not rely on any settled background meaning other than the ordinary meaning of “located” when it enacted section 1348, because neither the federal banking statutes nor the cases interpreting them had established one. Wachovia concedes that Congress’ use of “located” and its cognates to refer to national banking associations in federal statutes has been “far from uniform.” Appellant‘s Supp. Br. at 1. In some sections of title 12, the context makes clear that “location” is being used in a specialized sense to refer only to charter location. See, e.g.,
Neither did Congress rely on any settled background meaning of “located” in the
A line of cases prior to 1948 did interpret “located” to refer to charter location in the former venue statute. See, e.g., Mfr.‘s Nat‘l Bank v. Baack, 16 F. Cas. 671, 673 (C.C.S.D.N.Y.1871) (“It is quite apparent, from all these statutory provisions, that congress [sic] regards a national banking association as being ‘located’ at the place specified in its organization certification.“); Raiola v. Los Angeles First Nat‘l Trust & Savings Bank, 133 Misc. 630, 233 N.Y.S. 301, 302 (N.Y.City Ct.1929) (relying on Baack to conclude that “[t]he location of a national banking association is the place specified in its organization certificate“); Leonardi v. Chase Nat‘l Bank, 81 F.2d 19, 21-22 (2d Cir.1936) (crediting Baack‘s conclusion that “located” refers to charter location and holding that a bank is only “established” at its charter location, not at its branch offices). However, none of these cases confronted the question whether a bank is located at its branch offices. On the contrary, the Baack case, which provided the authority for the subsequent cases, was decided long before the McFadden Act, and so necessarily presupposed that charter location was the only candidate for “location.” Thus Baack did not create an “established understanding” that “located” excludes branch offices; branch offices did not even exist at the time it was decided. Similarly, neither Leonardi nor Raiola, in relying on Baack‘s characterization of the venue statute, confronted the issue of whether a bank is “located” in those places in which it has branch offices.
It follows that there was no settled background understanding of “located” as it applied to branch offices prior to 1948. This is unsurprising of course, because interstate branch offices did not exist prior to 1933. See supra. The issue was very seldom raised, much less settled, in the fifteen years between the 1933 statute and the enactment of section 1348.
B.
Undeterred, Wachovia argues that section 1348 must be interpreted in light of a broad historical purpose, which Wachovia characterizes as the intent “to give national banks the same access to diversity jurisdiction as that enjoyed by state corporations and individual citizens generally.” Appellant‘s Supp. Br. at 3; see also Firstar Bank, 253 F.3d at 988 (“Congress passed
Wachovia points out that, prior to 1882, Congress had provided general federal question jurisdiction of all suits involving national banks. Appellant‘s Supp. Br. at 2 (citing Petri v. Commercial Nat‘l Bank of Chicago, 142 U.S. 644, 648, 12 S.Ct. 325, 35 L.Ed. 1144 (1892)). But Congress sought to reduce this broad access to the federal
Wachovia argues that these two Acts established a settled background understanding, re-adopted by Congress in section 1348, that national banks should have the same jurisdictional access to federal courts as state banks and citizens. See Appellant‘s Supp. Br. at 2; see also Firstar Bank, 253 F.3d at 993 (“‘located’ should be construed to maintain jurisdictional equality between national banks and state banks or other corporations.“). For support, Wachovia relies on statements in two Supreme Court cases commenting on the 1882 Act. See Petri, 142 U.S. at 649, 12 S.Ct. 325 (noting that, under the 1882 Act, national banks “were placed in the same category with banks not organized under the laws of the United States“); Leather Mfr.‘s Nat‘l Bank v. Cooper, 120 U.S. 778, 780, 7 S.Ct. 777, 30 L.Ed. 816 (1887) (describing the purpose of the 1882 Act as “to put national banks on the same footing as the banks of the state where they were located for all the purposes of [federal] jurisdiction“); see also Mercantile Nat‘l Bank v. Langdeau, 371 U.S. 555, 566, 83 S.Ct. 520, 9 L.Ed.2d 523 (1963) (“Section 4 [of the 1882 and 1887 Acts] apparently sought to limit, with exceptions, the access of national banks to, and their suability in, the federal courts to the same extent to which non-national banks are so limited.“). On the basis of these generalizations, Wachovia would have us hold that “located” in section 1348 must be construed to exclude branch offices.
As an initial matter, we must observe that, though we are invited to interpret the word “located” in light of a supposed background principle of parity, we are confronted with several different formulations of that parity principle with no guidance on how to select among them. The 1882 Act required jurisdictional parity between national banks and state banks, and the Cooper Court commented that it was “intended to put national banks on the same footing as the banks of the state where they were located.” Cooper, 120 U.S. at 780, 7 S.Ct. 777. In contrast, the 1887 Act required jurisdictional parity between national banks and individual citizens. Yet the Petri Court suggested that the 1887 Act established parity between national banks and “other corporations and individual citizens.” Petri, 142 U.S. at 651, 12 S.Ct. 325 (emphasis added) (rejecting the argument that the 1887 Act stripped away all diversity jurisdiction of suits involving national banks). Here, Wachovia urges us to “give national banks the same access to diversity jurisdiction as that enjoyed by state corporations and individual citizens generally.” Appellant‘s Supp. Br. at 3. And the Seventh Circuit called for “jurisdictional equality between national banks and state banks and other corporations.” Firstar Bank, 253 F.3d at 993. None of these formulations are equivalent. More-
But even if we thought the statute was ambiguous enough to warrant consulting such abstract, judicially intuited purposes, and even if the abstract purpose urged upon us were sufficiently definite to provide clear guidance, we would reject Wachovia‘s historical argument for at least three reasons.
First, the Supreme Court‘s characterizations in Petri and Cooper rested on the actual text of the 1882 Act. The 1882 Act was couched in terms of jurisdictional parity between national banks and state banks. See supra. But that text was repealed and replaced in 1887. The 1887 Act described national banks’ citizenship in the terms “located” and “established,” while including a clarifying clause about jurisdic-
Second, even if the 1882 and 1887 Acts could be read to establish a parity principle, and even if we believed that Congress adopted this parity principle in section 1348, it seems clear that any principle formulated in the 1880s would be inapplicable or, at best, neutral as to the issue before us, because interstate branch offices did not exist until 1933. Plainly, the parity guaranteed in the 1887 Act, namely parity between national banks and individual citizens, was neutral on the issue of branch offices, because individual citizens do not have anything analogous to branch offices. And the Congress that required parity with state banks in 1882 (which parity was repealed in 1887) was not confronted with the possibility that national banks would be conducting business in multiple states. The Supreme Court in Bougas made a similar observation on the 1864 predecessor to the former venue statute:
It suffices to stress that Congress did not contemplate today‘s national banking system, replete with branches, when it formulated the 1864 Act; that there are no sure indicators of 1864 congres-
sional intent with respect to a banking system that did not then exist; and that prior to 1927, and indeed, prior to 1933, Congress had no occasion whatsoever to be concerned with state-court venue other than at the place designated in the bank‘s charter.
Bougas, 434 U.S. at 43, 98 S.Ct. 88. Even if Wachovia were correct in arguing that “Congress impliedly consented to the Supreme Court‘s ‘settled meaning’ of the statute [in 1948],” Appellant‘s Supp. Br. at 3, it still could not be correct in arguing that such a “settled meaning” (derived from Supreme Court cases decided in 1887 and 1892) had anything to say about the yet-unforeseen issue of branch banking.
In other words, even if the parity principle(s) ascribed by the Supreme Court to Congress in the 1882 Act and the 1887 Act were somehow incorporated into the 1948 statute, any such principle would only guarantee that national banks are subject to the rules of diversity jurisdiction, instead of automatically triggering federal question jurisdiction. See, e.g., Petri, 142 U.S. at 648, 12 S.Ct. 325 (noting that the purpose of the 1882 Act was to eliminate federal “arising under” jurisdiction for suits involving national banks). The 1882 and 1887 Acts put national banks on “parity” with state banks and corporations only in this limited sense, namely that the access of all three to the federal courts would now be determined by their citizenship in various states—rather than by the presence of a federal charter. See Horton, 387 F.3d at 433 (rejecting the argument that “this approach
In fact, Wachovia, the dissent, the Fifth Circuit, and the Seventh Circuit all rely on the following language from Petri as critical evidence for their sweeping “principle of jurisdictional parity“: “No reason is perceived why it should be held that congress [sic] intended [in the 1887 Act] that national banks should not resort to federal tribunals as other corporations and individual citizens might.” Petri, 142 U.S. at 650-51, 12 S.Ct. 325. See Appellant‘s Supp. Br. at 2 (quoting this language); post at 435 (same); Firstar Bank, 253 F.3d at 986 (same); Horton, 387 F.3d at 433 & n. 32 (same).4 But, read in context, this lan-
Precisely the same analysis applies to the language from the Cooper case quoted by Wachovia, the dissent, the Fifth Circuit, and the Seventh Circuit. The Cooper Court remarked that the 1882 Act “was evidently intended to put national banks on the same footing as the banks of the state where they were located for all the purposes of the jurisdiction of the courts of the United States.” Cooper, 120 U.S. at 780, 7 S.Ct. 777; see also Appellant‘s Supp. Br. at 2 (quoting this language); post at 435 (same); Firstar Bank, 253 F.3d at 986 (same); Horton, 387 F.3d at 429 (same). But the issue that the Cooper Court addressed was whether general federal question ju-
Likewise, precisely the same analysis also applies to the Langdeau case of 1963, quoted by Wachovia, the Fifth Circuit, the Seventh Circuit. In Langdeau, the Supreme Court commented as follows:
[T]he 1882 Act and the 1887 Act were designed to overcome the effect of [prior statutes] which allowed national banks to sue and be sued in the federal district and circuit courts solely because they were national banks, without regard to diversity, amount in controversy or the existence of a federal question in the usual sense.
Langdeau, 371 U.S. at 565-66, 83 S.Ct. 520 (emphasis added). But Wachovia, the Fifth Circuit, and the Seventh Circuit all quote only the very next sentence from Langdeau, which reads as follows:
Section 4 [of the 1882 and 1887 Acts] apparently sought to limit, with exceptions, the access of national banks to, and their suability in, the federal courts to the same extent to which non-national banks are so limited.
Third, and perhaps most tellingly, if Congress desired to “maintain this parity” between national banks and corporations, Firstar Bank, 253 F.3d at 993, it is very surprising that Congress did not adopt similar language in section 1348 to the language it adopted soon afterward in
In sum, Wachovia‘s attempts to alter the ordinary meaning of “located” by invoking a “settled meaning” of the term decided prior to enactment are unconvincing. “Located” carried no settled background meaning in statutory usage or case law, and section 1348 did not adopt any preexisting “parity principle” that might illuminate its meaning here.
C.
Notwithstanding the evident weakness and transparent flaws in the Fifth and Seventh Circuit opinions, the dissent stands on these opinions, as well as the Ninth Circuit‘s 1943 opinion in American Surety Co., which interpreted the language of the 1887 Act. See post at 435-40. If we believed that raw numbers were relevant, we would point out that the dissent fails to count the Second Circuit‘s recent observation, though not in holding, that favors our interpretation. See World Trade Center Properties, 345 F.3d at 161 (“Defendant Wells Fargo is a national bank ... and by statute is deemed to be a citizen of every state in which it has offices.” (citing
Because statutory interpretation must rest on analysis rather than a tally of judicial dispositions, the dissent‘s assertion that “prior to 1992, the ‘unquestioned’ and ‘longstanding interpretation’ was that ‘located’ did not include the branches of a national bank,” is without significance. Post at 436 (alteration omitted) (quoting Horton, 387 F.3d at 428-29). But it is worth noting that, thus phrased, this observation is hardly ingenuous. No court challenged the dissent‘s construction of the term until 1992 only because there was no such construction available: the first case to ad-
IV.
The word “located” in
Because it is unsupported by statutory and historical analysis, the rival interpretation of the dissent and the Fifth and Seventh Circuits amounts to little more than judicial assertion of a policy preference in favor of federal forums for national banking associations. This policy may be preferable; indeed, Congress may ultimately adopt this policy by amending the statutory language, as it did to
[A]ccommodating our diversity jurisdiction to the changing realities of commercial organization ... is not only performed more legitimately by Congress than by courts, but it is performed more intelligently by legislation than by interpretation of the statutory word ‘citizen.’ ... We have long since decided that, having established special treatment for corporations, we will leave the rest to Congress; we adhere to that decision.
Carden v. Arkoma Assocs., 494 U.S. 185, 197, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990).
Because both Wachovia and Schmidt are citizens of South Carolina, the judgment of the district court is vacated. The case is remanded with instructions to the district court to dismiss for lack of federal jurisdiction.
VACATED AND REMANDED
KING, Circuit Judge, dissenting:
I write separately because I disagree with the panel majority‘s reading of
As explained herein, the majority‘s conclusion that the term “located” also includes Wachovia‘s branch offices in South Carolina is incorrect for at least two reasons. First, as it is used in § 1348, “located” is an ambiguous term, implicating congressional intent. Congress has never sought or intended to relegate disputes involving national banks to the state courts. It has, on the contrary, consistently intended to provide national banks with the same access to the federal courts as that accorded other banks and corporations. And the Supreme Court has recognized and enforced congressional intent on this point. Second, I disagree with the view that the Court‘s decision in Citizens & Southern National Bank v. Bougas, 434 U.S. 35, 98 S.Ct. 88, 54 L.Ed.2d 218 (1977)—construing the term “located” as it was used in a separate statute,
I.
In construing an enactment of Congress, a court is to utilize two steps of analysis. See Newport News Shipbldg. & Dry Dock Co. v. Brown, 376 F.3d 245, 248 (4th Cir.2004). First, a reviewing court must assess whether the statutory term being construed is plain or ambiguous. If the term is unambiguous, the court simply applies the term‘s plain meaning. If the term is ambiguous, however, the reviewing court must take a second step and seek to determine the construction intended by Congress. See id. In this dispute, the term “located,” as found in § 1348, is ambiguous, and Congress intended for that term to refer to Wachovia‘s principal place of business in North Carolina. My dissenting view on this issue is supported by the history of § 1348 and its statutory predecessors, by Supreme Court precedent, and by decisions of the courts of appeals that have addressed the meaning of “located” in the context of federal court jurisdiction.1
A.
We are obliged first to assess whether the pertinent provision of § 1348 “‘has a plain and unambiguous meaning‘” in this proceeding. United States ex rel. Wilson v. Graham County Soil & Water Conservation Dist., 367 F.3d 245, 250 (4th Cir.2004) (quoting Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997)). If “a statute speaks with clarity to an issue,” then its meaning is plain and there is no need for further judicial inquiry. Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 475, 112 S.Ct. 2589, 120 L.Ed.2d 379 (1992); see also S.C. Dep‘t of Health & Envtl. Control v. Commerce & Indus. Ins. Co., 372 F.3d 245, 255 (4th Cir.2004). By contrast, a statutory term must be deemed ambiguous, if, when examined in context, it is susceptible to more than one reasonable interpretation. Wilson, 367 F.3d at 248. If such an ambiguity is apparent, we must then ascertain the “interpretation which
Put most simply, I part company with the panel majority on its view that “located” is an unambiguous statutory term. Under the accepted definitions of “locate,” the term refers to a particular or specific position, rather than to a general physical presence. See, e.g., Black‘s Law Dictionary 958 (8th ed.2004) (defining “location” as “[t]he specific place or position of a person or thing“); Webster‘s Third New International Dictionary 1327 (reprint 1993) (1981) (defining “locate” as “to set or establish in a particular spot or position“).2 In this proceeding, “located” could refer either to Wachovia‘s principal place of business (North Carolina), to the place named in its certificate of organization (North Carolina), or to any state in which Wachovia has established branch offices (such as South Carolina). As the majority observes, the Bougas Court recognized such an ambiguity in how the term “located” was used in
B.
The relevant history of our national banks reveals that Congress intended for such banks to enjoy the same access to federal courts as that accorded other banks and corporations. When Congress first authorized the creation of national banks in 1863, it provided that suits by and against them could be initiated in the federal courts. See Act of Feb. 25, 1863, ch. 58, 12 Stat. 665, 681. In 1882, Congress amended its 1863 enactment to eliminate automatic federal question jurisdiction over all disputes involving national banks. See Leather Mfrs.’ Bank v. Cooper, 120 U.S. 778, 780-81, 7 S.Ct. 777, 30 L.Ed. 816 (1887). Nonetheless, the amendment provided plainly that jurisdiction over lawsuits involving national banks “shall be the same as, and not other than, the jurisdiction for suits by or against banks not organized under any law of the United States....” Act of July 12, 1882, ch. 290, 22 Stat. 162, 163. The Court promptly construed this
In 1887, Congress revised the jurisdictional statute to include the language that we must assess today. See Act of Mar. 3, 1887, ch. 373, 24 Stat. 552, 554 (providing that “all national banking associations ... shall ... be deemed citizens of the States in which they are respectively located“). The 1887 enactment also provided that, “in such cases the circuit and district courts shall not have jurisdiction other than such as they would have in cases between individual citizens of the same State.” Id. at 554-55. In assessing this statutory revision, the Court again recognized and applied the clear intent of Congress that national banks be accorded equal access to the federal courts. See Petri, 142 U.S. at 650-51, 12 S.Ct. 325 (“No reason is perceived why it should be held that congress intended that national banks should not resort to federal tribunals as other corporations and individual citizens might.“); Fin. Software Sys., Inc. v. First Union Nat‘l Bank, 84 F.Supp.2d 594, 600 (E.D.Pa.1999) (recognizing that the 1887
As this historical review reflects, the Court has viewed § 1348 as according national banks the same access to the federal courts as that enjoyed by state banks and corporations. Significantly, Congress has never altered the pertinent statutory language, although it has repeatedly revised other aspects of the jurisdictional statute.4 In my view, Congress has thereby, in each of these enactments, manifested its intent to sanction applicable judicial and administrative interpretations of the statute. See Bragdon v. Abbott, 524 U.S. 624, 645, 118 S.Ct. 2196, 141 L.Ed.2d 540 (1998) (“When administrative and judicial interpretations have settled the meaning of an existing statutory provision, repetition of the same language in a new statute indicates ... the intent to incorporate its administrative and judicial interpretations as well.“).
C.
Three of our sister courts of appeals have faced the very issue posed to us today, and I agree with their decisions construing the term “located” in § 1348 to provide national banks the same access to the federal courts as that accorded other banks and corporations.5 Most recently,
In fact, as the Horton court recognized, “[p]rior to 1992, the ‘unquestioned’ and ‘longstanding interpretation’ was that ‘located’ did not include the branches of a national bank.” 387 F.3d at 428-29 (emphasis in original) (quoting Baker v. First Am. Nat‘l Bank, 111 F.Supp.2d 799, 800 (W.D.La.2000)).7 The Comptroller of the Currency has also endorsed this view. See O.C.C. Interpretive Letter No. 952, 2003 WL 23221430, at *4 (O.C.C. June 2003) (“National banks are to be treated for diversity jurisdiction purposes in a manner similar to state banks.“). As the Faul court has aptly explained, for sixty years leading up to the 1948 codification of § 1348, the term “located” was construed to mean that national banks would enjoy parity with state banks and corporations, and we must presume that Congress intended for that construc-
II.
Notwithstanding the foregoing, the panel majority has concluded that the Court‘s decision in Citizens & Southern National Bank v. Bougas, 434 U.S. 35, 98 S.Ct. 88, 54 L.Ed.2d 218 (1977), is controlling here. With respect, three compelling reasons serve to undercut the majority‘s reliance on Bougas. First, the Bougas Court confined its ruling to the state court venue provision of
A.
First of all, in rendering its decision in Bougas, the Court was assessing the congressional use of the term “located” in another statute, and its reasoning does not bind us. The Bougas appeal involved an issue of state court venue only, and the Court, in explaining its holding, carefully recognized that venue doctrines are primarily concerned with the convenience of the parties. In so doing, the Court concluded that, in the modern age, authorizing venue as present in a place where a national bank operates a branch office would not be unduly burdensome. Bougas, 434 U.S. at 44 & n. 10, 98 S.Ct. 88. Although the Court recognized that § 1348 also contains the term “located,” id. at 36 n. 1, 98 S.Ct. 88, this singular reference was, as the Horton court aptly observed, merely pointed out by the Bougas Court “‘in a footnote, with no further comment....‘” Horton, 387 F.3d at 433. Moreover, the Bougas Court‘s holding was confined to § 94 only, and the Court explicitly declared that it was not addressing any issue of venue in the federal courts. Bougas, 434 U.S. at 39, 98 S.Ct. 88 (referencing
Second, the in pari materia canon of statutory construction does not compel us to construe “located,” as found in § 1348, in the same manner as the Court construed § 94 in Bougas. Of course, statutes in pari materia—or pertaining to the same subject matter—should be construed “as if they were one law.” Erlenbaugh v. United States, 409 U.S. 239, 243, 93 S.Ct. 477, 34 L.Ed.2d 446 (1972). This canon is only applicable, however, when the statutes address the same subject. See Faul, 253 F.3d at 990; 2B Norman J. Singer, Sutherland Statutory Construction § 51.03, at 138 (6th ed.2004) (stating that “where the same subject is treated in several acts having different objects the statutes are not in pari materia“). While the doctrines of both venue and jurisdiction concern whether a national bank may initiate suit or be sued in federal court, there are significant meaningful distinctions between them. See Neirbo Co. v. Bethlehem Shipbldg. Corp., 308 U.S. 165, 168, 60 S.Ct. 153, 84 L.Ed. 167 (1939) (“This basic difference between the court‘s power and the litigant‘s convenience is historic in the federal courts.“).10 Put simply, venue provisions address the convenience of the parties, and they are designed to minimize the cost of obtaining a court‘s judgment. Id. at 990-91. Hence, the Bougas decision was premised on its conclusion that, with respect to state court proceedings, authorizing venue to lie in any county where a national bank operates a branch office, as opposed to the county of bank‘s incorporation, would not unduly inconvenience the party litigants. See Bougas, 434 U.S. at 44, 98 S.Ct. 88 (observing that “what
Diversity jurisdiction, on the other hand, does not implicate any issue of convenience to the parties. Its principal purpose is to minimize potential bias against out-of-state parties. Guar. Trust Co. v. York, 326 U.S. 99, 111, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945) (“Diversity jurisdiction is founded on assurance to nonresident litigants of courts free from susceptibility to potential local bias.“); Ziady v. Curley, 396 F.2d 873, 875 (4th Cir.1968) (recognizing that “one of the principal purposes of diversity jurisdiction was to give a citizen of one state access to an unbiased court to protect him from parochialism if he was forced into litigation in another state in which he was a stranger and of which his opponent was a citizen“). As Chief Judge Flaum explained in Faul, “while venue provisions minimize the cost of obtaining a court‘s judgment without regard to what that judgment might be, diversity jurisdiction seeks to ensure a correct decision, in the sense of being rendered on the merits of the parties’ case rather than because of prejudice against a foreigner.” 253 F.3d at 991. The Faul court thus properly concluded that “the affirmative reasons offered for the [Bougas] court‘s holding have no applicability to questions of jurisdiction [,]” because “reductions in the cost of litigating do not justify separating national banks from all other corporations so as to deny them federal diversity jurisdiction....” Id. at 989-90.
C.
Finally, though different terms used in the same statute should be assigned different meanings whenever possible, this principle of construction does not dictate our resolution of this jurisdictional dispute. Section 1348 utilizes two terms—“established” and “located“—to refer to the presence of a bank. As a result, the majority reads the term “established” to refer to a bank‘s charter location, and it reads “located” to refer to a bank‘s physical presence in general, concluding that “if Congress wishes to specify principal place of business and thereby exclude branch locations, it can easily do so.” Ante at 421 (emphasis in original). In the 1880s, when these terms first appeared in the national bank jurisdictional statute, such banks were not authorized to engage in branch banking. Consequently, as the Horton court recognized, the terms “‘established’ and ‘locat-
In my view, it is more compelling to conclude that Congress, in 1948, intended to ratify the Supreme Court‘s earlier rulings, and thus to construe “located” to include only a national bank‘s principal place of business. See Bragdon, 524 U.S. at 645, 118 S.Ct. 2196. Indeed, as the Faul court observed, “the canon that different words in the same statute should be given different meanings can be complied with by considering ‘established’ as referring only to the place specified in the bank‘s charter, while giving ‘located’ a meaning that includes a bank‘s principal place of business.” 253 F.3d at 992.
III.
Pursuant to the foregoing, diversity jurisdiction is present here, and our creation of a circuit split on this issue is unwarranted. Because the majority has unjustifiably circumscribed federal court jurisdiction of