Burke v. Fleet National Bank

742 A.2d 293, 252 Conn. 1, 1999 Conn. LEXIS 425
CourtSupreme Court of Connecticut
DecidedDecember 20, 1999
DocketSC 16157
StatusPublished
Cited by33 cases

This text of 742 A.2d 293 (Burke v. Fleet National Bank) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burke v. Fleet National Bank, 742 A.2d 293, 252 Conn. 1, 1999 Conn. LEXIS 425 (Colo. 1999).

Opinions

Opinion

BORDEN, J.

The sole issue in this reservation is whether General Statutes § 36a-1561 prohibits a bank2 [3]*3from charging a convenience fee to a nondepositor who uses that bank’s automated teller machine (ATM). We answer the reservation in the negative.

The stipulation reveals the following facts. The plaintiffs are John P. Burke, the banking commissioner of the state of Connecticut (commissioner), and the state of Connecticut. The defendants, Fleet National Bank (Fleet), First Union National Bank (First Union), and BankBoston, N.A. (BankBoston), are national banks that have established and operate ATMs in Connecticut. An ATM is defined under Connecticut law as “a stationary or mobile unattended device, including a satellite device but excluding a point of sale terminal, at which banking transactions, including, but not limited to, deposits, withdrawals, advances, payments or transfers, may be conducted . . . .” General Statutes § 36a-2 (3). A point of sale terminal is defined as “a device located in a commercial establishment at which sales transactions can be charged directly to the buyer’s deposit, loan or credit account, but at which deposit transactions cannot be conducted . . . .” General Statutes § 36a-2 (45).

In addition to servicing its own depositors, an establishing bank3 may, through its participation in an ATM network, process transactions for nondepositors who hold ATM car ds issued by other banks, also called card-issuing banks, which are members of the ATM network. [4]*4There are three types of charges associated with transactions processed through an ATM network. First, an interchange fee is a fee that an establishing bank receives from another member bank in the network, whose depositor uses the establishing bank’s ATM. Second, the ATM depositor fee“is a fee charged by a bank to its own depositor for use of an ATM operated by either the depositor’s bank or another bank. Third, the ATM nondepositor fee, also commonly referred to as a convenience fee or surcharge, is a fee charged by an establishing bank to a nondepositor who uses that bank’s ATM. At issue in this appeal is the permissibility under state law of imposing the ATM nondepositor fee.4

The issue raised by this appeal originated with an interpretive letter issued by the commissioner in September, 1995, which declared that § 36a-156 implicitly prohibits ATM nondepositor fees. In January, 1997, Fleet brought an action against the commissioner and the state banking department in the United States District Court for the District of Connecticut, claiming that § 36a-156 does not prohibit ATM nondepositor fees, or, in the alternative, that federal law preempts any such prohibition. The District Court granted summary judgment for Fleet, holding that § 36a-156 does not prohibit ATM nondepositor fees. Fleet Bank, National Assn. v. Burke, 23 F. Sup. 2d 196, 203 (D. Conn. 1998). On appeal from that judgment, however, the United States Court of Appeals for the Second Circuit held that the District Court lacked subject matter jurisdiction. Fleet Bank, National Assn. v. Burke, 160 F.3d 883, 893 (2d Cir. 1998), cert. denied, 527 U.S. 1004, 119 S. Ct. 2340, 144 L. Ed. 2d 237 (1999). Accordingly, the Second Circuit vacated the judgment and directed that the action be dismissed. Id.

[5]*5Fleet and First Union immediately brought separate actions against the commissioner, which since have been consolidated in the United States District Court for the District of Connecticut, claiming various violations of 42 U.S.C. § 1983. See First Union National Bank v. Burke, United States District Court, Docket No. 3:98CV2171 (JBA) (D. Conn. April 7, 1999). Thereafter, the commissioner, invoking General Statutes §§ 36a-505 [6]*6and 36a-52,6 issued atemporary ex parte order and notice [7]*7of hearing, claiming that Fleet, First Union and Bank-Boston were in violation of § 36a-156 by imposing ATM nondepositor fees, and ordering those banks to cease and desist from that practice. The banks requested a hearing in accordance with § 36a-50. The hearing was postponed while the District Court considered requests for a preliminary injunction filed by the banks and the United States Office of the Comptroller of the Currency (Comptroller), during which time the banks agreed not to impose ATM nondepositor fees. The commissioner did not proceed with the hearing with respect to Bank-Boston.

After receiving the cease and desist order, Fleet and First Union filed applications for an injunction in the Superior Court pursuant to § 36a-52 (d) to set aside or suspend the enforcement of the order. After a hearing, the trial court, Teller, J., denied the banks’ applications for an injunction. Fleet National Bank v. Burke, 45 Conn. Sup. 566, 580, 727 A.2d 823 (1998).

Shortly thereafter, the Comptroller intervened in the consolidated action seeking to restrain the administrative hearing by virtue of a temporary restraining order and a preliminary injunction against the commissioner [8]*8and the banking department. The District Court granted the Comptroller’s request for a preliminary injunction, and prohibited the commissioner from continuing with the pending administrative proceedings against Fleet and First Union until final disposition of the merits of the Comptroller’s complaint.7 First Union National Bank v. Burke, supra, United States District Court, Docket No. 3:98CV2171 (JBA). That decision expressly did not preclude either the Comptroller from initiating its own administrative proceeding pursuant to § 36a-156, or the commissioner from seeking enforcement through the state courts. Id.

The commissioner then brought this action in the Superior Court, pursuant to his authority under § 36a-50 (b), to enforce his interpretation of § 36a-156, as described in his September, 1995 interpretive letter. At the request of all parties, and to expedite the resolution of this litigation, the trial court, Hon. Jerry Wagner, judge trial referee, approved the joint stipulation of facts and reserved the following question for the advice of the Appellate Court pursuant to General Statutes § 52-2358 and Practice Book § 73-1:9 “Does General Stat[9]*9utes § 36a-156 prohibit a bank which has established an automated teller machine from charging a fee to a nondepositor who uses the bank’s machine?” We transferred the reservation from the Appellate Court to this court pursuant to General Statutes § 51-199 (c) and Practice Book § 65-2. We answer the reservation in the negative.

We first address the applicable standard of review. “Ordinarily, this court affords deference to the construction of a statute applied by the administrative [10]*10agency empowered by law to carry out the statute’s purposes. . . . [A]n agency’s factual and discretionary determinations are to be accorded considerable weight by the courts. ” (Internal quotation marks omitted.)

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Bluebook (online)
742 A.2d 293, 252 Conn. 1, 1999 Conn. LEXIS 425, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burke-v-fleet-national-bank-conn-1999.