Before 1987, the Bank Holding Company Act of 1956 (BHCA) allowed
States to prohibit an out-of-state bank holding company from owning
an in-state "bank," which was defined to include an institution
that both accepted demand deposits and engaged in the commercial
lending business. In 1981, appellee, an Illinois bank holding
company, applied to Florida to establish and operate an "industrial
savings bank" (ISB) in that State, averring that "all deposit
relationships" would be insured "to the maximum extent allowed by
the Federal Deposit Insurance Corporation" (FDIC). Appellant Lewis,
the State Comptroller, refused to process the application on the
ground that two state statutes prohibited out-of-state holding
companies from operating ISBs in Florida. Appellee then filed a
suit claiming that the state statutes violated the Commerce Clause,
and the District Court granted summary judgment in its favor,
ordering Lewis to process the application. The court subsequently
denied without explanation appellee's motion for attorney's fees
under 42 U.S.C. § 1988. In 1987, shortly before the Court of
Appeals affirmed on the merits and remanded for an explanation of
why the attorney's fees claim had been denied, amendments to the
BHCA expanded the definition of "bank" to include all banks whose
deposits are insured by the FDIC. Lewis then filed a petition for
rehearing in the Court of Appeals, arguing that the new legislation
mooted the controversy because, since appellee's proposed ISB would
have FDIC-insured deposits, the refusal to process the application
was authorized by federal law, and hence immune from Commerce
Clause challenge. The court denied the petition, awarded appellee
attorney's fees for the appeal, and remanded for the District Court
to calculate the amount of that award and to determine whether an
award was appropriate for work done in the District Court.
Held:
1. The case has been rendered moot by the 1987 BHCA amendments.
The only evidence in the record of appellee's stake in the case's
outcome
Page 494 U. S. 473
is its application to establish and operate an FDIC-insured ISB,
which stake was eliminated by the amendments. The application
constitutes no evidence that appellee intended to establish an
uninsured bank, since "insured by the FDIC to the maximum
extent allowed" envisions FDIC insurance. There is no merit to
appellee's argument that its suit nevertheless remains justiciable
because its dispute with Florida is "capable of repetition, yet
evading review." Since Florida's allegedly unconstitutional action
is no longer unconstitutional with respect to insured ISBs, there
is no reasonable expectation that appellee will suffer the same
wrong again. Moreover, the State's refusal to issue a bank charter
is not the sort of action which, by reason of the inherently short
duration of the opportunity for remedy, is likely to evade review.
See Los Angeles v. Lyons, 461 U. S.
95,
461 U. S. 109.
Pp.
494 U. S.
477-482.
2. Appellee's postargument,
ex parte affidavit averring
its interest in opening, and explaining its failure to file an
updated application for, an uninsured ISB will not be evaluated by
this Court in the first instance. Since, however, the case's
mootness is attributable to a change in the governing legal
framework, and since appellee may have a residual claim, which
understandably was not asserted previously, that it intended to
apply for an uninsured ISB not covered by the new framework, the
case is remanded for consideration of such materials as the parties
may submit to supplement the record.
See Diffenderfer v.
Central Baptist Church of Miami, Inc., 404 U.
S. 412,
404 U. S. 415.
494 U. S. 482-483.
3. Because the event that mooted the controversy occurred before
the Court of Appeals' judgment, appellee was not, at the appeal
stage, a "prevailing party" entitled to recover attorney's fees
under § 1988.
See Rhodes v. Stewart, 488 U. S.
1,
488 U. S. 3-4.
Whether appellee can be deemed a "prevailing party" in the District
Court, and whether § 1988 fees are available in a Commerce Clause
challenge, must be resolved by the courts below in the first
instance. P.
494 U. S.
483.
827 F.2d 1517 and 838 F.2d 457, vacated and remanded.
SCALIA, J., delivered the opinion for a unanimous Court.
Page 494 U. S. 474
JUSTICE SCALIA delivered the opinion of the Court.
This case involves an Illinois bank holding company's challenge
to certain Florida banking statutes that are alleged to violate the
Commerce Clause, U.S.Const., Art. 1, § 8, cl. 3. We conclude that
the case has been rendered moot by 1987 amendments to the Bank
Holding Company Act.
I
Under § 3(d) of the Bank Holding Company Act of 1956 (BHCA), 70
Stat. 134, as amended, 12 U.S.C. § 1842(d), a bank holding company
with its principal banking operations in one State may not
establish or acquire a bank in another State unless the latter
State's statutes specifically authorize it to do so. The BHCA thus
effectively permits States to prevent out-of-state holding
companies from owning in-state banks. That license for state
discrimination applies, however, only if the proposed banking
subsidiary is a "bank" as defined in § 2(c) of the BHCA, 70 Stat.
133, as amended, 12 U.S.C. § 1841(c). Until 1987, a banking
institution qualified as a "bank" for purposes of the BHCA only if
it both accepted demand deposits and engaged in the business of
commercial lending. As amended by the Competitive Equality
Amendments of 1987, 101 Stat. 554, the BHCA definition was expanded
to include all banks whose deposits are insured by the Federal
Deposit Insurance Corporation (FDIC).
See 12 U.S.C. §
1841(c)(1)(A).
Page 494 U. S. 475
On June 29, 1981, appellee Continental Bank Corporation, a bank
holding company with its principal place of business in Illinois,
filed an application with the Florida Department of Banking and
Finance to establish and operate an "industrial savings bank" (ISB)
in Florida. According to the application, "
[a]ll deposit
relationships'" would be insured "`to the maximum extent allowed by
the [FDIC].'" Juris. Statement 1-2.
Appellant Lewis, Comptroller of the State of Florida and head of
the Department of Banking and Finance, refused to process the
application on the ground that two Florida statutes, Fla.Stat. §
658.29(1) (Supp.1980) and Fla.Stat. § 664.03 (14) (Supp.1980),
prohibited out-of-state bank holding companies from operating ISBs
in Florida. Continental thereupon filed a complaint in the United
States District Court for the Northern District of Florida,
claiming that the statutes violated the Commerce Clause,
U.S.Const., Art. I, § 8, cl. 3, and praying for declaratory and
injunctive relief. The District Court granted summary judgment for
the plaintiff, holding that the Florida statutes unconstitutionally
discriminated against nonresidents, and ordered Lewis to process
Continental's application.
In June, 1984, after the District Court had entered judgment,
the State of Florida amended its statutes to prohibit the
chartering of any new ISBs in the State, whether by resident or
nonresident enterprises. Fla.Stat. § 664.02(1) (Supp.1984). Lewis
then moved to amend or alter the judgment pursuant to Rule 59(e) of
the Federal Rules of Civil Procedure, arguing that the new
nondiscriminatory ban had rendered the validity of the challenged
statutes moot. The District Court denied the motion, reasoning that
the new statute, even if constitutional, did not moot the case,
because the State's unconstitutional behavior was "capable of
repetition, yet evading review." App. 66a. Meanwhile, Continental
had moved for an award of attorney's fees under 42 U.S.C. § 1988,
arguing that Lewis' enforcement of the statutes
Page 494 U. S. 476
had deprived it of its constitutional rights in violation of 42
U.S.C. § 1983. The District Court denied that motion without
explanation.
On appeal, the Court of Appeals for the Eleventh Circuit
affirmed on the merits issue, though resting its determination that
the case was not moot on the different ground that the supervening
ban on new ISBs was unconstitutional, since it had the purpose and
effect of denying nonresident holding companies access to Florida
deposits. The Court of Appeals did not resolve Continental's claim
for attorney's fees, but remanded the case to the District Court
for an explanation of why that claim had been denied.
Continental Illinois Corp. v. Lewis, 827 F.2d 1517
(1987).
In August, 1987, shortly before the Court of Appeals issued its
opinion, there was again a change in the law, this time at the
federal level. As part of the Competitive Equality Amendments of
1987, 101 Stat. 554, Congress expanded the BHCA definition of
"bank." The new definition, codified at 12 U.S.C. § 1841(c)(1)(A),
includes any "insured bank as defined by section 3(h) of the
Federal Deposit Insurance Act," which in turn defines "insured
bank" as "any bank . . . the deposits of which are insured" by the
FDIC. 12 U.S.C. § 1813(h). After this amendment to the BHCA, Lewis
filed a petition for rehearing in the Court of Appeals, arguing
that the new legislation mooted the controversy because the ISB
that Continental proposed to establish would have FDIC-insured
deposits and therefore would be a "bank" within the coverage of the
BHCA. Such coverage, Lewis argued, would mean that Florida's
refusal to permit Continental to establish an ISB, even if
discriminatory against interstate commerce, would be authorized by
federal law, and hence immune from challenge under the Commerce
Clause.
The Court of Appeals denied the petition for rehearing in a
brief opinion, saying that it did "not agree that the amendments
necessarily would make Continental's operation of an ISB in Florida
a
banking' activity in every instance," and
Page 494 U. S.
477
that it could not "now guess what the parties will do or not
do as a result of the enactment of the August 10, 1987 [BHCA]
amendments." 838 F.2d 457, 458 (CA11 1988). In addition, the court
awarded Continental attorney's fees for the appeal, without
explaining the basis for the award, and remanded to the District
Court for a calculation of a proper award for the appeal as well as
a determination whether an award was appropriate for work done in
the District Court.
Lewis appealed to this Court, invoking our jurisdiction under 28
U.S.C. § 1254(2) (1982 ed.), now repealed, 102 Stat. 662, 664. We
noted probable jurisdiction. 490 U.S. 1097 (1989).
II
Under Article III of the Constitution, federal courts may
adjudicate only actual, ongoing cases or controversies.
Deakins
v. Monaghan, 484 U. S. 193,
484 U. S. 199
(1988);
Preiser v. Newkirk, 422 U.
S. 395,
422 U. S. 401
(1975). To invoke the jurisdiction of a federal court, a litigant
must have suffered, or be threatened with, an actual injury
traceable to the defendant and likely to be redressed by a
favorable judicial decision,
Allen v. Wright, 468 U.
S. 737,
468 U. S.
750-751 (1984);
Valley Forge Christian College v.
Americans United for Separation of Church & State, Inc.,
454 U. S. 464,
454 U. S.
471-473 (1982). Article III denies federal courts the
power "to decide questions that cannot affect the rights of
litigants in the case before them,"
North Carolina v.
Rice, 404 U. S. 244,
404 U. S. 246
(1971), and confines them to resolving
"'real and substantial controvers[ies] admitting of specific
relief through a decree of a conclusive character, as distinguished
from an opinion advising what the law would be upon a hypothetical
state of facts.'"
Ibid. (quoting
Aetna Life Insurance Co. v.
Haworth, 300 U. S. 227,
300 U. S. 241
(1937)). This case-or-controversy requirement subsists through all
stages of federal judicial proceedings, trial and appellate. To
sustain our jurisdiction in the present case, it is not enough that
a dispute was very much alive when suit was filed, or when review
was obtained in the
Page 494 U. S. 478
Court of Appeals.
Deakins, supra, at
484 U. S. 199;
Steffel v. Thompson, 415 U. S. 452,
419 U. S. 459,
n. 10 (1974). The parties must continue to have a "
personal
stake in the outcome'" of the lawsuit, Los Angeles v.
Lyons, 461 U. S. 95,
461 U. S. 101
(1983) (quoting Baker v. Carr, 369 U.
S. 186, 369 U. S. 204
(1962)).
On the record before us, the only evidence of Continental's
stake in the outcome was its application to establish and operate
an ISB. That application, however, pertained to an FDIC-insured
institution, specifying that "all deposit relationships" would be
insured "to the maximum extent allowed" by the FDIC. Thus, the
stake represented by that application was eliminated by the 1987
amendments to the BHCA, which make it clear that, no matter how the
Commerce Clause issues in this suit are resolved, the application
can constitutionally be denied. Continental concedes that, under
the amended BHCA, an FDIC-insured ISB is a "bank" within the BHCA
definition; that Florida is thus authorized by Congress to exclude
insured ISBs owned by nonresident holding companies; and that such
exclusion (by virtue of its congressional authorization) does not
violate the Commerce Clause.
Continental has argued in this Court that the quoted language of
the application meant that the ISB would have insurance if
insurance was available, and none if none was available. We think
not. "Insured by the FDIC to the maximum extent allowed" is quite
different from "insured by the FDIC if possible," or "insured by
the FDIC to the maximum extent allowed, if any." It envisions FDIC
insurance, but instead of specifying a fixed dollar amount of that
insurance (the permissible level of which has varied over the
years,
see, e.g., 94 Stat. 147) specifies the maximum
amount allowable from time to time. The application thus
constitutes no evidence that Continental had an intent to establish
an
uninsured bank. Nor can it be said that the difference
between an insured bank and an uninsured bank is inconsequential,
so that an expressed intention to open the one displays
Page 494 U. S. 479
as well an intention to open the other. Particularly at a time
when prospective depositors have been reading news of widespread
bank failures, FDIC insurance may well be seen as essential to
viability.
Continental contends that it still has a claim for relief
because its complaint sought not only the specific relief of
ordering Lewis to process the original application, but also a
declaration that the Florida statutes were unconstitutional and an
injunction against their enforcement in the future. The BHCA
amendment, it argues, does not render that requested relief
nugatory insofar as it applies to uninsured banks. That may well be
so, but the Article III question is not whether the requested
relief would be nugatory as to the world at large, but whether
Continental has a stake in that relief. Even in order to pursue the
declaratory and injunctive claims, in other words, Continental must
establish that it has a "specific live grievance" against the
application of the statutes to uninsured ISBs,
Golden v.
Zwickler, 394 U. S. 103,
394 U. S. 110
(1969), and not just an "'abstract disagreemen[t]'" over the
constitutionality of such application,
Thomas v. Union Carbide
Agricultural Products Co., 473 U. S. 568,
473 U. S. 580
(1985) (quoting
Abbott Laboratories, Inc. v. Gardner,
387 U. S. 136,
387 U. S. 148
(1967)). As we have discussed, nothing in the record establishes
that. Continental informs us that, under Florida law, it remains
free to amend its application so as to seek an uninsured, rather
than an insured, ISB. Perhaps so. But it could also be said that
every bank in the country is free to file an application seeking an
uninsured Florida ISB. In the one case as in the other, the mere
power to seek is not an indication of the intent to do so, and thus
does not establish a particularized, concrete stake that would be
affected by our judgment. Continental's challenge to the
constitutionality of the Florida statutes' application to an
uninsured bank that it has neither applied for nor expressed any
intent to apply for amounts to a request for advice as to "what the
law would be upon a hypothetical state of facts,"
Aetna Life
Insurance Co.
Page 494 U. S. 480
v. Haworth, 300 U.S. at
300 U. S. 241,
or with respect to "
contingent future events that may not occur
as anticipated, or indeed may not occur at all.'" Thomas,
supra, at 473 U. S.
580-581, quoting 13A C. Wright, A. Miller, & E.
Cooper, Federal Practice and Procedure § 3532 (1984).
Continental sought to supplement the record in this Court, after
argument, by filing the affidavit of an officer of one of its
subsidiaries, averring Continental's interest in opening an
uninsured Florida ISB, and explaining its failure to file an
updated application for such a bank. In the circumstances of the
present case, we are not disposed to accept such an affidavit as
dispositive without providing petitioner the opportunity of
rebuttal. At the time Continental's challenge to denial of its
application for an insured ISB was mooted by the amendments to the
BHCA, this litigation had been in progress for almost seven years.
An order vacating the judgment on grounds of mootness would deprive
Continental of its claim for attorney's fees under 42 U.S.C. § 1988
(assuming,
arguendo, it would have such a claim), because
such fees are available only to a party that "prevails" by winning
the relief it seeks,
see Rhodes v. Stewart, 488 U. S.
1 (1988);
Hewitt v. Helms, 482 U.
S. 755 (1987). This interest in attorney's fees is, of
course, insufficient to create an Article III case or controversy
where none exists on the merits of the underlying claim,
see
Diamond v. Charles, 476 U. S. 54,
476 U. S. 70-71
(1986). Where, on the face of the record, it appears that the only
concrete interest in the controversy has terminated, reasonable
caution is needed to be sure that mooted litigation is not pressed
forward, and unnecessary judicial pronouncements on even
constitutional issues obtained, solely in order to obtain
reimbursement of sunk costs. Reasonable caution includes, we think,
not accepting as conclusive the
ex parte affidavit of the
party seeking fees without providing the other party the
opportunity to adduce controverting facts that show the alleged
dispute to be "abstract, feigned, or hypothetical."
Sibron v.
New York, 392 U. S. 40,
392 U. S. 57
(1968).
Page 494 U. S. 481
In any event, whenever possible (and it is possible where the
decision under review is that of a federal court) the evaluation of
such factual contentions bearing upon Article III jurisdiction
should not be made by this Court in the first instance. We
therefore decline to accept Continental's supplementation of the
record in this Court.
Finally, Continental urges that its suit remains justiciable,
even if it has no concrete interest in application of the statutes
to uninsured banks, because its dispute with Florida is "capable of
repetition, yet evading review." This contention is twice wrong. We
have permitted suits for prospective relief to go forward despite
abatement of the underlying injury only in the "exceptional
situations,"
Los Angeles v. Lyons, 461 U.S. at
461 U. S. 109,
where the following two circumstances were simultaneously
present:
"'(1) the challenged action [is] in its duration too short to be
fully litigated prior to its cessation or expiration, and (2) there
was a reasonable expectation that the same complaining party would
be subjected to the same action again.'"
Murphy v. Hunt, 455 U. S. 478,
455 U. S. 482
(1982) (per curiam) (quoting
Weinstein v. Bradford,
423 U. S. 147,
423 U. S. 149
(1975)). Neither of these requirements is satisfied here. Since
Florida's allegedly unconstitutional action is no longer
unconstitutional with respect to insured ISBs, there is no
"reasonable expectation" that Continental will suffer the same
wrong again -- unless, of course, it intends to establish an
uninsured ISB, which does not appear on this record.
Cf.
California Coastal Comm'n v. Granite Rock Co., 480 U.
S. 572,
480 U. S. 578
(1987);
Press-Enterprise Co. v. Superior Court of California,
Riverside County, 478 U. S. 1,
478 U. S. 6
(1986). Nor is the State's refusal to issue a bank charter the sort
of action which, by reason of the inherently short duration of the
opportunity for remedy, is likely forever to "evad[e] review."
See, e.g., Burlington Northern R. Co. v. Maintenance of Way
Employes, 481 U. S. 429,
482 U. S. 436,
n. 4 (1987) (injunction on secondary picketing in railroad labor
dispute);
Nebraska Press Assn. v.
Stuart, 427 U. S. 539,
Page 494 U. S. 482
427 U. S.
546-547 (1976) (protective order on press coverage of
criminal trial). If Continental applies for and is denied a charter
for an uninsured bank in Florida, there will be ample time to
obtain judicial review of the denial.
III
Our ordinary practice in disposing of a case that has become
moot on appeal is to vacate the judgment with directions to
dismiss.
See, e.g., Deakins v. Monaghan, 484 U.S. at
484 U. S. 204;
United States v. Munsingwear, Inc., 340 U. S.
36,
340 U. S. 39-40
(1950). However, in instances where the mootness is attributable to
a change in the legal framework governing the case, and where the
plaintiff may have some residual claim under the new framework that
was understandably not asserted previously, our practice is to
vacate the judgment and remand for further proceedings in which the
parties may, if necessary, amend their pleadings or develop the
record more fully.
See Diffenderfer v. Central Baptist Church
of Miami, Inc., 404 U. S. 412,
404 U. S. 415
(1972). That is essentially the situation here. The need for
Continental to set forth its interest in an uninsured ISB could not
have been apparent to anyone until the BHCA amendments were passed.
This did not occur until the case had already been argued and
submitted in the Court of Appeals. Had Florida's petition for
rehearing on the basis of the amendments been granted, Continental
could properly be criticized for not supplementing the record at
that point. In fact, however, the petition was denied, and we do
not think Continental was negligently sleeping on its rights not to
take the extraordinary step of seeking to supplement the record at
the appellate level merely because the motion was pending.
Accordingly, we vacate the judgment and remand for the Court of
Appeals to consider (or to remand for the District Court to
consider) such material as may be submitted by both parties in
supplementation of the record, bearing upon Continental's concrete
interest in the grant of an application for an
Page 494 U. S. 483
uninsured Florida ISB. Since the judgment below is vacated on
the basis of an event that mooted the controversy before the Court
of Appeals' judgment issued, Continental was not, at that stage, a
"prevailing party" as it must be to recover fees under § 1988,
see Rhodes v. Stewart, 488 U.S. at
488 U. S. 3-4.
Whether Continental can be deemed a "prevailing party" in the
District Court, even though its judgment was mooted after being
rendered but before the losing party could challenge its validity
on appeal is a question of some difficulty,
see, e.g., Palmer
v. Chicago, 806 F.2d 1316, 1321 (CA7 1986), that has been
addressed by neither court below. We decline to resolve that, as
well as the related question whether § 1988 fees are available in a
Commerce Clause challenge.
The judgment is vacated and the cause remanded for such
proceedings as are appropriate and consistent with this
opinion.
It is so ordered.