Bank One Chicago, N. A. v. Midwest Bank & Trust Co.
516 U.S. 264 (1996)

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OCTOBER TERM, 1995

Syllabus

BANK ONE CHICAGO, N. A. v. MIDWEST BANK & TRUST CO.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT

No. 94-1175. Argued November 28, 1995-Decided January 17, 1996

Petitioner Bank One sued respondent Midwest Bank, alleging that, in dishonoring a check Bank One had submitted for collection, Midwest failed to meet its obligations under a regulation prescribed by the Board of Governors of the Federal Reserve System (Board) pursuant to the Expedited Funds Availability Act (Act), 12 U. S. C. §§4001-4010. The District Court entered summary judgment for Bank One, but the Seventh Circuit vacated that judgment and ordered the action dismissed for lack of subject-matter jurisdiction. The appellate court focused on three of § 4010's civil liability provisions: § 401O(a) renders "any depository institution which fails to comply with any requirement imposed under this [Act or its implementing regulations] with respect to any person other than another depository institution ... liable [in damages] to such person"; § 401O(f) empowers the Board to "impose on or allocate among [banks] the risks of loss and liability in connection with any aspect of the [check] payment system"; § 4010(d) provides for concurrent federalcourt and state-court jurisdiction over "[a]ny action under this section." These provisions, the court concluded, demonstrate that the Act authorizes original federal-court jurisdiction only when a "person other than [a] depository institution" sues a "depository institution," § 4010(a), i. e., principally, when a depositor sues a bank. Interbank disputes, the court said, are to be "handled administratively" before the Board or perhaps in state court.

Held: The Act provides for federal-court jurisdiction not only in suits between customers and banks, but also in cases initiated by one bank against another bank. Section 4010's language, reinforced by its title and drafting history, impel reading both subsection (a), which makes banks liable to "any person other than another depository institution," and subsection (f), which governs banks' liability inter se, as authorizing claims for relief enforceable in federal court as prescribed in subsection (d). Section 4010 is entitled "Civil liability"; its purpose is to afford private parties a claim for relief based on violations of the Act and its implementing regulations. Both subsections (a) and (f) impose civilliability for such violations. Though the two prescriptions are not paral-


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leI-most prominently, subsection (f) vests the Board with authority to establish the governing liability standards-they serve the same key purpose: Both permit recovery of damages caused by a regulated party's failure to comply with the Act. Section 4010's drafting history suggests that interbank liability rules were to be developed administratively because Congress recognized that interbank disputes arising out of the check payment system may be more complex than those involving banks and depositors, not because Congress intended to create remedies that would be adjudicated in different forums. It is implausible that Congress directed the Board to handle such disputes administratively, for § 4010 does not explicitly confer adjudicatory authority on the Board, nor set forth the relevant procedures for resolution of private disputes. See, e. g., American Airlines, Inc. v. Wolens, 513 U. S. 219; Goit Independence Joint Venture v. FSLIG, 489 U. S. 561, 574. The interpretation of § 4010 offered by Bank One and the United States is sensible because it allows all check-related claims arising out of the same transaction to be brought in a single federal or state court. The Seventh Circuit's reading, in contrast, would yield an incoherent jurisdictional scheme, whereby bank-depositor claims would be adjudicated in one such court, interbank claims under the Act would originate before the Board, and interbank claims under state law would presumably have to be raised in a separate state-court proceeding. Pp. 270-276.

30 F.3d 64, reversed and remanded.

GINSBURG, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and STEVENS, O'CONNOR, KENNEDY, SOUTER, THOMAS, and BREYER, JJ., joined, and in which SCALIA, J., joined in part. STEVENS, J., filed a concurring opinion, in which BREYER, J., joined, post, p. 276. SCALIA, J., filed an opinion concurring in part and concurring in the judgment, post, p. 279.

Robert A. Long, Jr., argued the cause for petitioner. With him on the briefs were Mark A. Weiss and Jeffrey S. Blumenthal.

Jeffrey P. Minear argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Days, Assistant Attorney General Hunger, Deputy Solicitor General Bender, Mark B. Stern, and Douglas B. Jordan.


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Full Text of Opinion

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