No. 19-1115 In the Supreme Court of the United States

[Pages:25]No. 19-1115

In the Supreme Court of the United States

AMERICAN BANKERS ASSOCIATION, PETITIONER v.

NATIONAL CREDIT UNION ADMINISTRATION

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

NOEL J. FRANCISCO Solicitor General Counsel of Record

JOSEPH H. HUNT Assistant Attorney General

MARK B. STERN DANIEL AGUILAR

Attorneys Department of Justice Washington, D.C. 20530-0001 SupremeCtBriefs@ (202) 514-2217

QUESTION PRESENTED

Whether the definitions of "`local community'" and "`rural district'" adopted by the National Credit Union Administration are a permissible exercise of the agency's authority to "prescribe, by regulation, a definition for" those terms. 12 U.S.C. 1759(g)(1).

(I)

ADDITIONAL RELATED PROCEEDINGS

United States District Court (D.D.C.): American Bankers Ass'n v. National Credit Union Admin., No. 16-cv-2394 (Mar. 29, 2018)

United States Court of Appeals (D.C. Cir.): American Bankers Ass'n v. National Credit Union Admin., Nos. 18-5154 and 18-5181 (Aug. 20, 2019)

(II)

TABLE OF CONTENTS

Page

Opinions below .............................................................................. 1 Jurisdiction .................................................................................... 1 Statement ...................................................................................... 1 Argument..................................................................................... 13 Conclusion ................................................................................... 20

TABLE OF AUTHORITIES

Cases:

American Bankers Ass'n v. NCUA, 347 F. Supp. 2d 1061 (D. Utah 2004)................................. 20

American Bankers Ass'n v. NCUA, No. 05-cv-2247, 2008 WL 2857678 (M.D. Pa. July 21, 2008) ..................................................... 20

American Hosp. Ass'n v. NLRB, 499 U.S. 606 (1991) ...... 20 Barnhart v. Thomas, 540 U.S. 20 (2003)............................. 20 Chevron U.S.A. Inc. v. Natural Res. Def. Council,

Inc., 467 U.S. 837 (1984)..........................7, 10, 13, 14, 15, 16 City of Mesquite v. Aladdin's Castle, Inc.,

455 U.S. 283 (1982).............................................................. 10 Commissioner v. Pepsi-Cola Niagara Bottling

Corp., 399 F.2d 390 (2d Cir. 1968) ..................................... 17 Henry Ford Health Sys. v. Department of Health &

Human Servs., 654 F.3d 660 (6th Cir. 2011), cert. denied, 567 U.S. 952 (2012) ....................................... 16 Household Credit Servs., Inc. v. Pfennig, 541 U.S. 232 (2004).............................................................. 16 Lindeen v. SEC, 825 F.3d 646 (D.C. Cir. 2016) ........ 8, 15, 17 National Credit Union Admin. v. First Nat'l Bank & Trust Co., 522 U.S. 479 (1998) ......................................... 2 Ragsdale v. Wolverine World Wide, Inc., 535 U.S. 81 (2002) ............................................................... 16

(III)

IV

Cases--Continued:

Page

Rush Univ. Med. Ctr. v. Burwell, 763 F.3d 754 (7th Cir. 2014)...................................................................... 16

United States v. Mead Corp., 533 U.S. 218 (2001) ............. 16

Women Involved in Farm Econ. v. United States Dep't of Agric., 876 F.2d 994 (D.C. Cir. 1989), cert. denied, 493 U.S. 1019 (1990) ........................... 8, 15, 17

Statutes:

Administrative Procedure Act, 5 U.S.C. 551 et seq., 701 et seq. ............................................................................... 7 5 U.S.C. 706(2)(A).............................................................. 7 5 U.S.C. 706(2)(C).............................................................. 7

Credit Union Membership Access Act, Pub. L. No. 105-219, ? 103, 112 Stat. 917-918 .................... 3

Federal Credit Union Act, 12 U.S.C. 1751 et seq. ................ 1 12 U.S.C. 1751 note ..................................................... 2, 18 12 U.S.C. 1752a.................................................................. 3 12 U.S.C. 1759(b) ............................................................... 2 12 U.S.C. 1759(b)(3) .......................................... 2, 8, 14, 18 12 U.S.C. 1759(g) ............................................................. 17 12 U.S.C. 1759(g)(1) .................................2, 3, 7, 10, 14, 18

Miscellaneous:

59 Fed. Reg. 29,066 (June 3, 1994)......................................... 3 63 Fed. Reg. 71,998 (Dec. 30, 1998) ....................................... 3 68 Fed. Reg. 18,334 (Apr. 15, 2003) ....................................... 3 75 Fed. Reg. 36,257 (June 25, 2010)............................. 3, 5, 19 75 Fed. Reg. 37,246 (June 28, 2010)................................... 4, 5 78 Fed. Reg. 13,460 (Feb. 28, 2013) ....................................... 3 81 Fed. Reg. 88,412 (Dec. 7, 2016) .............................. passim 84 Fed. Reg. 59,989 (Nov. 7, 2019) ................................. 10, 13

In the Supreme Court of the United States

No. 19-1115 AMERICAN BANKERS ASSOCIATION, PETITIONER

v. NATIONAL CREDIT UNION ADMINISTRATION

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1a-42a) is reported at 934 F.3d 649. The opinion of the district court (Pet. App. 43a-89a) is reported at 306 F. Supp. 3d 44.

JURISDICTION

The judgment of the court of appeals was entered on August 20, 2019. A petition for rehearing was denied on December 12, 2019 (Pet. App. 90a-91a). The petition for a writ of certiorari was filed on March 11, 2020. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

Under the Federal Credit Union Act (FCUA or Act), 12 U.S.C. 1751 et seq., the membership of a federal credit union may include "[p]ersons or organizations within a well-defined local community, neighborhood, or

(1)

2

rural district." 12 U.S.C. 1759(b)(3). The Act directs the National Credit Union Administration (NCUA) to "prescribe, by regulation, a definition for the term `welldefined local community, neighborhood, or rural district.'" 12 U.S.C. 1759(g)(1). In 2016, the NCUA revised its definitions of "local community" and "rural district." 81 Fed. Reg. 88,412, 88,412 (Dec. 7, 2016). Petitioner challenged the revised definitions, arguing that they are arbitrary, capricious, and contrary to law. Pet. App. 60a. The district court granted judgment to petitioner with respect to two aspects of the revised definitions and granted judgment to the NCUA with respect to the remaining claims. Id. at 43a-89a. The court of appeals reversed with respect to those two aspects, but ordered a remand without vacatur with respect to a different aspect of the revised definitions. Id. at 1a-42a.

1. During the Great Depression, Congress enacted the FCUA to make credit more widely available to working Americans who had struggled to obtain loans from banks. See 12 U.S.C. 1751 note; National Credit Union Admin. v. First Nat'l Bank & Trust Co., 522 U.S. 479, 483 (1998); Pet. App. 3a-5a. Membership in a federal credit union may be based on either "a common bond of occupation or association" or a shared presence "within a" community. 12 U.S.C. 1759(b). A community credit union may include "[p]ersons or organizations within a well-defined local community, neighborhood, or rural district." 12 U.S.C. 1759(b)(3). Congress did not define those terms, but instead directed the NCUA-- the agency that regulates credit unions--to "prescribe,

3

by regulation, a definition for the term `well-defined local community, neighborhood, or rural district.'" 12 U.S.C. 1759(g)(1); see 12 U.S.C. 1752a.1

2. In December 2016, the NCUA exercised its authority under Section 1759(g)(1) to revise its definitions of two statutory terms--"local community" and "rural district"--as part of a broader effort "to maximize access to federal credit union services to the extent permitted by law." 81 Fed. Reg. at 88,412.

a. In the 2016 rulemaking, the NCUA expanded its definition of "local community." 81 Fed. Reg. at 88,412. Before the 2016 revision, the NCUA had defined a "local community" as a "well-defined" area with "`specific geographic boundaries,'" including (1) a single political jurisdiction, "i.e., a city, county, or their political equivalent, or any individual portion thereof"; (2) a Core Based Statistical Area (CBSA), or a portion of it, that has no more than 2.5 million people; or (3) a Metropolitan Division of a CBSA, or a portion of it, that has no more than 2.5 million people. Id. at 88,440. A CBSA is a geographic area with a "core of 10,000 or more population, plus adjacent territory that has a high degree of

1 The law that first expressly authorized the NCUA to define those terms was enacted in 1998. See Credit Union Membership Access Act, Pub. L. No. 105-219, ? 103, 112 Stat. 917-918. The NCUA had previously determined whether a community credit union could be established for a particular locale by considering whether the credit union would serve a "single, well-defined area where residents interact." 59 Fed. Reg. 29,066, 29,071, 29,07729,078 (June 3, 1994). The agency has exercised its definitional authority numerous times since 1998. See, e.g., 63 Fed. Reg. 71,998 (Dec. 30, 1998); 68 Fed. Reg. 18,334 (Apr. 15, 2003); 75 Fed. Reg. 36,257 (June 25, 2010); 78 Fed. Reg. 13,460 (Feb. 28, 2013); 81 Fed. Reg. 88,412.

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