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Tradewinds Inc. v. Citibank

July 27, 1981

TRADEWINDS, INC., APPELLEE
v.
CITIBANK, N. A., NBG PROPERTIES, INC. AND IBG PROPERTIES, INC. CITIBANK, N.A., APPELLANT



ON APPEAL FROM THE UNITED STATES DISTRICT COURT DISTRICT COURT OF THE VIRGIN ISLANDS (Civil Action No. 80-7)

Author: Garth

Before: ADAMS, WEIS and GARTH, Circuit Judges

GARTH, Circuit Judge .

In Helco, Inc. v. First National City Bank , 470 F.2d 883 (3d Cir. 1972) a panel of this court held that venue would not lie under 12 U.S.C. § 94 (1976) to sue a national bank in the District Court of the Virgin Islands when that bank was chartered in the Southern District of New York. Today we face the very issue which this court confronted in Helco . Indeed, even the defendant is the same, although it is now known by another name.*fn1 Recognizing that Helco controls our disposition, we reaffirm our previous holding that an action against Citibank may not be brought in the District Court of the Virgin Islands. We do so because the Internal Operating Procedures of this court provide that:

It is the tradition of this court that reported panel opinions are binding on subsequent panels.Thus, no subsequent panel overrules a published opinion of a previous panel. Court in banc consideration is required to overrule a published opinion of this court.*fn2

Our holding here is not predicated on any precedent other than this court's decision in Helco . If not for Helco, logic and recent developments, including the intervening Supreme Court decision of Citizen & Southern National Bank v Bougas , 434 U.S. 35 (1977), would dictate a contrary disposition.

I.

Plaintiff, Tradewinds, Inc. sued IBG Properties, Inc., NBG Properties, Inc. (both Virgin Islands corporations) and Citibank in the District Court of the Virgin Islands. Citibank, which is a national banking association chartered in the Southern District of New York, has a branch in the Virgin Islands. Tradewinds claimed the defendants, IBG, NBG and Citibank, had breached three contracts that they had with Tradewinds. Although Citibank was not a signatory to the contracts, Tradewinds asserted that IBG and NBG were subsidiaries of Citibank, and that the operations of these subsidiaries were intertwined with the operations of Citibank, the parent. The complaint also appeared to assert a claim of tortious interference with contract.

The District Court of the Virgin Islands denied Citibank's Fed.R.Civ.P. 12(b)(3) motion that the complaint against it be dismissed for improper venue. The court reasoned that the Helco court's discussion of venue did not constitute a holding but was dictum; that the spirit of Bougas commanded that venue be found in the Virgin Islands; and that the equities involved weighed heavily in favor of finding venue in the Virgin Islands.The district court therefore held that for the purposes of § 94, Citibank was "established" in the Virgin Islands because it operated a branch there. The district court then certified an interlocutory appeal under § 1292(b), which this court, in turn, accepted.*fn3

II.

The venue provision for national banks, 12 U.S.C. § 94 (1976), provides:

Action 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.

Although written in permissive terms, § 94 has been interpreted to be mandatory. See Citizen & Southern National Bank v. Bougas , 434 U.S. 35, 38 (1977). Thus far, all courts that have addressed the issue of venue in a federal court over a national bank have held that venue lies only in the district in which the national bank has been chartered.*fn4 See Id . at 39. To this point, the term "established", as it appears in § 94 has been equated with the term chartered. Citibank, as we have mentioned earlier, is chartered in the Southern District of New York, and under the cases to date, is thus "established" in that district for purposes of § 94 venue.

A.

In Helco , we faced the identical issue that is presented to us here: is a national bank "established" where it has a branch bank?*fn5 The district court there had held that even if a national bank was not "established" where it maintained a branch, by operating a branch in a separate locale, the bank had waived the protection of § 94. Relying on federal decisions interpreting "established" and state cases interpreting the state venue provision ("in any State, county or municipal court in the county or city in which said association is located having jurisdiction in similar cases." § 94 (emphasis added)), our court in Helco held that a national bank was "established" only in the district where it was chartered. In the case of the First National City Bank, now Citibank, that district was the Southern District of New York. No other analysis appears in Helco. Helco , ...


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