OCTOBER TERM, 1995
Syllabus
BARNETT BANK OF MARION COUNTY, N. A.
v.
NELSON, FLORIDA INSURANCE COMMISSIONER, ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE
ELEVENTH CIRCUIT
No. 94-1837. Argued January 16, 1996-Decided March 26,1996
A 1916 federal law (Federal Statute) permits national banks to
sell insurance in small towns, but a Florida law (State Statute)
prohibits such banks from selling most types of insurance. When
petitioner Barnett Bank, a national bank doing business in a small
Florida town, bought a state licensed insurance agency, respondent
State Insurance Commissioner ordered the agency to stop selling the
prohibited forms of insurance. In this action for declaratory and
injunctive relief, the District Court held that the State Statute
was not pre-empted, but only because of the McCarran-Ferguson Act's
special insurance-related anti-preemption rule. That rule provides
that a federal law will
not pre-empt a state law enacted
"for the purpose of regulating the business of
insur
ance"-unless the federal statute
"specifically
relates to the business of insurance." 15 U. S. C. § 1012(b)
(emphasis added). The Court of Appeals affirmed.
Held: The Federal Statute pre-empts the State Statute.
Pp. 30-43.
(a) Under ordinary pre-emption principles, the State Statute
would be pre-empted, for it is clear that Congress, in enacting the
Federal Statute, intended to exercise its constitutionally
delegated authority to override contrary state law. The Federal and
State Statutes are in "irreconcilable conflict,"
Rice v.
Norman Williams Co., 458 U. S. 654, 659, since
the Federal Statute authorizes national banks to engage in
activities that the State Statute expressly forbids. Thus, the
State's prohibition would seem to "stan[d] as an obstacle to the
accomplishment" of one of the Federal Statute's purposes,
Hines v.
Davidowitz, 312 U. S. 52, 67, unless,
as the State contends, Congress intended to limit federal
permission to sell insurance to those circumstances permitted by
state law. However, by providing, without relevant qualification,
that national banks "may ... act as the agent" for insurance sales,
12 U. S. C. § 92, the Federal Statute's language suggests a broad,
not a limited, permission. That this authority is granted in
"addition to the
powers now vested ... in national [banks],"
ibid. (emphasis added), is also significant. Legislative
grants of both enumerated and incidental "powers" to national banks
historically have been interpreted as grants of
26
authority not normally limited by, but rather ordinarily
pre-empting, contrary state law. See,
e. g., First Nat. Bank of
San Jose v.
California, 262 U. S. 366, 368-369.
Where, as here, Congress has not expressly conditioned the grant of
power upon a grant of state permission, this Court has ordinarily
found that no such condition applies. See
Franklin Nat. Bank of
Franklin Square v.
New York, 347 U. S. 373. The
State's argument that special circumstances surrounding the Federal
Statute's enactment demonstrate Congress' intent to grant only a
limited permission is unpersuasive. Pp. 30-37.
(b) The McCarran-Ferguson Act's anti-pre-emption rule does not
govern this case, because the Federal Statute "specifically relates
to the business of insurance." This conclusion rests upon the Act's
language and purposes, taken together. The word "relates" is highly
general; and in ordinary English, the Federal Statute-which focuses
directly upon industry-specific selling practices and affects the
relation of insured to insurer and the spreading of
risk-"specifically" relates to the insurance business. The Act's
mutually reinforcing purposes-that state regulation and taxation of
the insurance business are in the public interest, and that
Congress'
"silence ... shall not be construed to impose any
barrier to [such] regulation or taxation," 15 U. S. C. § 1011
(emphasis added)-also support this view. This phrase, especially
the word "silence," indicates that the Act seeks to protect state
regulation primarily against inadvertent federal intrusion, not to
insulate state insurance regulation from the reach of all federal
law. The circumstances surrounding the Act's enactment also suggest
that the Act was passed to ensure that generally phrased
congressional statutes, which do not mention insurance, are not
applied to the issuance of insurance policies, thereby interfering
with state regulation in unanticipated ways. The parties' remaining
arguments to the contrary are unconvincing. Pp.37-43.
43 F.3d
631, reversed.
BREYER, J., delivered the opinion for a unanimous Court.
Nathan Lewin argued the cause and filed briefs for
petitioner. With him on the briefs were
Scott L. Nelson, James
R. Heavner, Jr., and
Richard E. Swartley.
Richard P. Bress argued the cause for the United States et al.
as amici curiae urging reversal. With him on the brief were
Solicitor General Days, Assistant Attorney General Hunger, Deputy
Solicitor General Bender, Edward C. DuMont, Anthony
J.
Steinmeyer, Jacob M. Lewis, Julie L.
27
Williams, L. Robert Griffin, Ernest C. Barrett III, and Joan M.
Bernott.
Daniel Y. Sumner argued the cause and filed a brief for
respondents Bill Nelson et al. With him on the brief were
David J. Busch, Dennis Silverman, and
Karen
Asher-Cohen. Ann M. Kappler argued the cause and filed a brief
for respondents Florida Association of Life Underwriters et al.
With her on the brief were
Scott A. Sinder, Sam Hirsch,
Bruce J. Ennis, Jr., Paul M. Smith, and
Donald
B. Verrilli, Jr.*
JUSTICE BREYER delivered the opinion of the Court.
The question in this case is whether a federal statute that
permits national banks to sell insurance in small towns preempts a
state statute that forbids them to do so. To answer this question,
we must consider both ordinary pre-emption principles, and also a
special federal anti-pre-emption rule, which provides that a
federal statute will
not pre-empt a
*Briefs of amici curiae urging reversal were filed for the
American Bankers Association et al. by John
J. Gill III,
Michael F. Crotty, Mathew H. Street, Richard M. Whiting, Leonard
J. Rubin, M. Thurman Senn, and David L. Glass; for American
Deposit Corp. et al. by Thaddeus Holt and Dennis M. Gingold; for
the Consumer Bankers Association et al. by David W Roderer, Eric L.
Hirschhorn, Donn C. Meindertsma, John W Anderson, and Jeffrey D.
Quayle; for the Florida Bankers Association by
J. Thomas
Cardwell and Virginia B. Townes; and for the New York Clearing
House Association by Bruce E. Clark, Michael M. Wiseman, and Norman
R. Nelson.
Briefs of
amici curiae urging affirmance were filed for
the American Council of Life Insurance by
David Overlock
Stewart, James M. Lichtman, Gary E. Hughes, and
Phillip E.
Stano; for the Council of Insurance Agents and Brokers by
Mark E. Herlihy; for the National Association of Insurance
Commissioners by
Ellen Dollase Wilcox; for the National
Conference of State Legislatures et al. by
Richard Ruda, Lee
Fennell, and
Arthur E. Wilmarth, Jr.; and for Don W.
Stephens et al. by
Stephen B. Cox, Suetta W Dickinson, Julie A.
Fuselier, Richard Blumenthal, Attorney General of Connecticut,
and
John G.
Haines, Assistant Attorney General.
28
state statute enacted "for the purpose of regulating the
business of
insurance"-unless the federal statute
"specifically relates to the business of insurance."
McCarran-Ferguson Act, 15 U. S. C. § 1012(b) (emphasis added). We
decide that the McCarran-Ferguson Act's special anti-pre-emption
rule does not govern this case, because the federal statute in
question "specifically relates to the business of insurance." We
conclude that, under ordinary pre-emption principles, the federal
statute pre-empts the state statute, thereby prohibiting
application of the state statute to prevent a national bank from
selling insurance in a small town.
I
In 1916 Congress enacted a federal statute that says that
certain national banks "may" sell insurance in small towns. It
provides in relevant part:
"In addition to the powers now vested by law in national [banks]
organized under the laws of the United States any such
[bank] located and doing business in any place [with a
population] ... [of not more than] five thousand ... may,
under such rules and regulations as may be prescribed by the
Comptroller of the Currency, act as the agent for any fire,
life, or other insurance company authorized by the authorities
of the State ... to do business [there], ... by soliciting and
selling insurance ... Provided, however, That no such bank shall
... guarantee the payment of any premium ... And provided further,
That the bank shall not guarantee the truth of any statement made
by an assured [when applying] ... for insurance." Act of Sept. 7,
1916 (Federal Statute), 39 Stat. 753, as amended, 12 U. S. C. § 92
(emphases changed).
In 1974 Florida enacted a statute that prohibits certain banks
from selling most kinds of insurance. I t says:
29
"No [Florida licensed] insurance agent ... who is associated
with, ... owned or controlled by ... a financial institution shall
engage in insurance agency activities .... " Fla. Stat. §
626.988(2) (Supp. 1996) (State Statute).
The term "financial institution" includes
"any bank ... [except for a] bank which is not a subsidiary or
affiliate of a bank holding company and is located in a city having
a population of less than 5,000 .... " § 626.988(1)(a).
Thus, the State Statute says, in essence, that banks cannot sell
insurance in Florida-except that an
unaffiliated small town
bank (i.
e., a bank that is not affiliated with a bank
holding company) may sell insurance in a small town.
Ibid.
In October 1993 petitioner Barnett Bank, an "affiliate[d]"
national bank which does business through a branch in a small
Florida town, bought a Florida licensed insurance agency. The
Florida State Insurance Commissioner, pointing to the State Statute
(and noting that the unaffiliated small town bank exception did not
apply), ordered Barnett's insurance agency to stop selling the
prohibited forms of insurance. Barnett, claiming that the Federal
Statute pre-empted the State Statute, then filed this action for
declaratory and injunctive relief in federal court.
The District Court held that the Federal Statute did not
pre-empt the State Statute, but only because of the special
insurance-related federal anti-pre-emption rule. The McCarran-
Ferguson Act, which creates that rule, says:
"No act of Congress shall be construed to invalidate, impair, or
supersede any law enacted by any State for the purpose of
regulating the business of insurance, or which imposes a fee or tax
upon such business, unless such Act specifically relates to the
business of insurance .... " McCarran-Ferguson Act, § 2(b), 59
Stat. 34, 15 U. S. C. § 1012(b).
30
The District Court decided both (1) that the Federal Statute did
not fall within the McCarran-Ferguson Act's exception because it
did not "specifically relat[e] to the business of insurance"; and
(2) that the State Statute was a "law enacted ... for the purpose
of regulating the business of insurance."
Barnett Bank of Marion
County, N.
A. v.
Gallagher, 839 F. Supp. 835,
840-841, 843 (MD Fla. 1993) (internal quotation marks omitted).
Consequently, the McCarran-Ferguson Act, in the District Court's
view, instructs courts not to "constru[e]" the Federal Statute "to
invalidate" the State Statute. 15 U. S. C. § 1012(b). The Eleventh
Circuit Court of Appeals, for similar reasons, agreed that the
Federal Statute did not pre-empt the State Statute.
Barnett Bank
of Marion County, N.
A. v.
Gallagher, 43 F.3d
631, 634-637 (1995).
We granted certiorari due to uncertainty among lower courts
about the pre-emptive effect of this Federal Statute. See
Owensboro Nat. Bank v.
Stephens, 44 F.3d
388 (CA6 1994) (pre-emption of Kentucky statute that prevents
national banks from selling insurance in small towns);
First
Advantage Ins., Inc. v.
Green, 652 So. 2d 562 (La. Ct.
App.), cert. and review denied, 654 So. 2d 331 (1995) (no
preemption). We now reverse the Eleventh Circuit.
II
We shall put the McCarran-Ferguson Act's special antipre-emption
rule to the side for the moment, and begin by asking whether, in
the absence of that rule, we should construe the Federal Statute to
pre-empt the State Statute. This question is basically one of
congressional intent. Did Congress, in enacting the Federal
Statute, intend to exercise its constitutionally delegated
authority to set aside the laws of a State? If so, the Supremacy
Clause requires courts to follow federal, not state, law. U. S.
Const., Art. VI, cl. 2; see
California Fed. Sav. &
Loan Assn. v.
Guerra, 479 U. S. 272, 280-281
(1987) (reviewing pre-emption doctrine).
31
Sometimes courts, when facing the pre-emption question, find
language in the federal statute that reveals an explicit
congressional intent to pre-empt state law.
E. g., Jones v.
Rath Packing Co., 430 U. S. 519, 525,
530-531 (1977). More often, explicit pre-emption language does not
appear, or does not directly answer the question. In that event,
courts must consider whether the federal statute's "structure and
purpose," or nonspecific statutory language, nonetheless reveal a
clear, but implicit, pre-emptive intent.
Id., at 525;
Fidelity Fed. Sav. &
Loan Assn. v.
De la
Cuesta, 458 U. S.
141, 152-153 (1982). A federal statute, for example, may create
a scheme of federal regulation "so pervasive as to make reasonable
the inference that Congress left no room for the States to
supplement it."
Rice v.
Santa Fe Elevator Corp.,
331 U. S. 218,
230 (1947). Alternatively, federal law may be in "irreconcilable
conflict" with state law.
Rice v.
Norman Williams
Co., 458 U. S.
654, 659 (1982). Compliance with both statutes, for example,
may be a "physical impossibility,"
Florida Lime &
Avocado Growers, Inc. v.
Paul, 373 U. S. 132, 142-143
(1963); or, the state law may "stan[d] as an obstacle to the
accomplishment and execution of the full purposes and objectives of
Congress."
Hines v.
Davidowitz, 312 U. S. 52, 67
(1941).
In this case we must ask whether or not the Federal and State
Statutes are in "irreconcilable conflict." The two statutes do not
impose directly conflicting duties on national banks-as they would,
for example, if the federal law said, "you must sell insurance,"
while the state law said, "you may not." Nonetheless, the Federal
Statute authorizes national banks to engage in activities that the
State Statute expressly forbids. Thus, the State's prohibition of
those activities would seem to "stan[d] as an obstacle to the
accomplishment" of one of the Federal Statute's purposes-unless, of
course, that federal purpose is to grant the bank only a very
limited permission, that is, permission to sell insurance
to the extent that state law also grants permission to do
so.
32
That is what the State of Florida and its supporting
amici argue. They say that the Federal Statute grants
national banks a permission that is limited to circumstances where
state law is not to the contrary. In their view, the Federal
Statute removes only federal legal obstacles, not state legal
obstacles, to the sale of insurance by national banks. But we do
not find this, or the State's related, ordinary preemption
arguments, convincing.
For one thing, the Federal Statute's language suggests a broad,
not a limited, permission. That language says, without relevant
qualification, that national banks "may ... act as the agent" for
insurance sales. 12 U. S. C. § 92. It specifically refers to "rules
and regulations" that will govern such sales, while citing as their
source not state law, but the federal Comptroller of the Currency.
Ibid. It also specifically refers to state regulation, while
limiting that reference to licensing-not of banks or insurance
agents, but of the insurance companies whose policies the bank, as
insurance agent, will sell.
Ibid.
For another thing, the Federal Statute says that its grant of
authority to sell insurance is in "addition to the
powers
now vested by law in national [banks]."
Ibid. (emphasis
added). In using the word "powers," the statute chooses a legal
concept that, in the context of national bank legislation, has a
history. That history is one of interpreting grants of both
enumerated and incidental "powers" to national banks as grants of
authority not normally limited by, but rather ordinarily
pre-empting, contrary state law. See,
e. g., First Nat. Bank of
San Jose v.
California, 262 U. S. 366, 368-369
(1923) (national banks' "power" to receive deposits pre-empts
contrary state escheat law);
Easton v.
Iowa, 188 U. S. 220, 229-230
(1903) (national banking system normally "independent, so far as
powers conferred are concerned, of state legislation"); cf.
Waite v.
Dowley, 94 U. S. 527, 533 (1877)
("[W]here there exists a concurrent right of legislation in the
States and in Congress, and the latter has exercised its
33
power, there remains in the States no authority to legislate on
the same matter").
Thus, this Court, in a case quite similar to this one, held that
a federal statute permitting, but not requiring, national banks to
receive savings deposits pre-empts a state statute prohibiting
certain state and national banks from using the word "savings" in
their advertising.
Franklin Nat. Bank of Franklin Square v.
New York, 347
U. S. 373, 375-379 (1954) (Federal Reserve Act provision that
national banks "may continue ... to receive ... savings deposits"
read as "declaratory of the right of a national bank to enter into
or remain in that type of business"). See also
De la Cuesta,
supra, at 154-159 (federal regulation permitting, but not
requiring, national banks to include in mortgage contracts a debt
accelerating "due on sale" clause pre-empts a state law forbidding
the use of such a clause); cf.
Lawrence County v.
LeadDeadwood School Dist. No. 40-1,
469 U. S. 256 (1985)
(federal statute providing that local government units "may" expend
federal funds for any governmental purpose pre-empts state law
restricting their expenditure).
In defining the pre-emptive scope of statutes and regulations
granting a power to national banks, these cases take the view that
normally Congress would not want States to forbid, or to impair
significantly, the exercise of a power that Congress explicitly
granted. To say this is not to deprive States of the power to
regulate national banks, where (unlike here) doing so does not
prevent or significantly interfere with the national bank's
exercise of its powers. See,
e. g., Anderson Nat.
Bank v.
Luckett, 321 U. S. 233, 247-252
(1944) (state statute administering abandoned deposit accounts did
not "unlawful[ly] encroac[h] on the rights and privileges of
national banks");
McClellan v.
Chipman, 164 U. S. 347, 358 (1896)
(application to national banks of state statute forbidding certain
real estate transfers by insolvent transferees would not "destro[y]
or hampe[r]" national banks' functions);
National Bank v.
Commonwealth, 9 Wall. 353, 362 (1870)
34
(national banks subject to state law that does not "interfere
with, or impair [national banks'] efficiency in performing the
functions by which they are designed to serve [the Federal]
Government").
Nor do these cases control the interpretation of federal banking
statutes that accompany a grant of an explicit power with an
explicit statement that the exercise of that power is subject to
state law. See,
e. g., 12 U. S. C. § 36(c) (McFadden
Act) (authorizing national banks to operate branches, but only
where state law authorizes state banks to do so); § 92a(a)
(Comptroller of Currency may grant fiduciary powers "by special
permit to national banks applying therefor, when not in
contravention of State or local law"). Not surprisingly, this Court
has interpreted those explicit provisions to mean what they say.
See,
e. g., First Nat. Bank in Plant City v.
Dickinson, 396
U. S. 122, 131 (1969) (under McFadden Act, state branching
restrictions apply to national banks);
First Nat. Bank of
Logan v.
Walker Bank &
Trust Co., 385 U. S. 252, 260-261
(1966) (same); see also
Van Allen v.
Assessors, 3
Wall. 573, 586 (1866) (enforcing 1864 amendments to National Bank
Act expressly authorizing state taxation of national bank
shares).
But, as we pointed out,
supra, at 32-33, where Congress
has not expressly conditioned the grant of "power" upon a grant of
state permission, the Court has ordinarily found that no such
condition applies. In
Franklin Nat. Bank, the Court made
this point explicit. It held that Congress did not intend to
subject national banks' power to local restrictions, because the
federal power-granting statute there in question contained "no
indication that Congress [so] intended ... as it has done
by
express language in several other instances." 347 U. S., at
378, and n. 7 (emphasis added) (collecting examples).
The Federal Statute before us, as in
Franklin Nat. Bank,
explicitly grants a national bank an authorization, permission, or
power. And, as in
Franklin Nat. Bank, it contains
35
no "indication" that Congress intended to subject that power to
local restriction. Thus, the Court's discussion in
Franklin Nat.
Bank, the holding of that case, and the other precedent we have
cited above, strongly argue for a similar interpretation here-a
broad interpretation of the word "may" that does not condition
federal permission upon that of the State.
Finally, Florida and its supporters challenge this
interpretation by arguing that special circumstances surrounding
the enactment of the Federal Statute nonetheless demonstrate
Congress' intent to grant only a limited permission (subject to
state approval). They point to a letter to Congress written by the
Comptroller of the Currency in 1916. The Comptroller attached a
draft of what became the Federal Statute, and the letter explains
to Congress why the Comptroller wants Congress to enact his
proposal. The letter says that, since 1900, many small town
national banks had failed; that some States had authorized small
town state banks to sell insurance; that providing small town
national banks with authority to sell insurance would help them
financially; and that doing so would also improve their competitive
position vis-a-vis state banks. The relevant language in the letter
(somewhat abridged) reads as follows:
"[Since 1900, of 3,084 small national banks, 438] have either
failed or gone into liquidation ....
[T]here are many banks located in [small towns] ... where the
small deposits which the banks receive may make it somewhat
difficult [to earn] ... a satisfactory return ....
"For some time I have been giving careful consideration to the
question as to how the powers of these small national banks might
be enlarged so as to provide them with additional sources of
revenue and place them in a position where they could better
compete with local State banks and trust companies which are
sometimes
36
authorized under the law to do a class of business not strictly
that of commercial banking ....
"[The federal banking laws, while granting national banks
certain "incidental powers," do not give them] either expressly nor
by necessary implication the power to act as agents for insurance
companies ....
"My investigations lead me respectfully to recommend to Congress
an amendment to the national-bank act by which national banks
located in [small towns] ... may be permitted to act as agents for
insurance companies ....
"It seems desirable from the standpoint of public policy and
banking efficiency that this authority should be limited to banks
in small communities. This additional income will strengthen them
and increase their ability to make a fair return ....
"I think it would be unwise and therefore undesirable to confer
this privilege generally upon banks in large cities where the
legitimate business of banking affords ample scope for the energies
of trained and expert bankers ....
"I inclose ... a draft ... designed to empower national banks
located in [small] towns ... under such regulations and
restrictions as may from time to time be approved and promulgated
by the Comptroller of the Currency, to act as agents for the
placing of insurance policies .... " 53 Congo Rec. 11001 (1916)
(letter from Comptroller Williams to the Chairman of the Senate
Bank and Currency Committee).
Assuming for argument's sake that this letter is relevant, and
in response to the arguments of Florida and its supporters, we
point out that the letter does not significantly advance their
cause. Although the letter mentions that enlarging the powers of
small national banks will help them "better compete with local
State banks," it primarily focuses upon small town national banks'
need for added revenue-
37
an objective met by a broad insurance-selling authority that is
not limited by state law. The letter refers to limitations that
federal regulation might impose, but it says nothing about
limitations imposed by
state regulation or
state law.
The letter makes clear that authority to sell insurance in small
towns is an added "incidental power" of a national bank-a term
that, in light of this Court's then-existing cases, suggested
freedom from conflicting state regulation. See
Easton, 188
U. S., at 229-230;
First Nat. Bank of San Jose, 262 U. S.,
at 368-369. The letter sets forth as potential objections to the
proposal (or to its extension to larger national banks) concerns
about distracting banking management or inhibiting the development
of banking expertisenot concerns related to state regulatory
control.
We have found nothing elsewhere in the Federal Statute's
background or history that significantly supports the State's
arguments. And as far as we are aware, the Comptroller's subsequent
interpretation of the Federal Statute does not suggest that the
statute provides only a limited authority subject to similar state
approval. Cf. 12 CFR § 7.7100 (1995); acc Interpretive Letter No.
366, CCH Fed. Banking L. Rep. , 85,536, p. 77,833 (1986).
In light of these considerations, we conclude that the Federal
Statute means to grant small town national banks authority to sell
insurance, whether or not a State grants its own state banks or
national banks similar approval. Were we to apply ordinary legal
principles of pre-emption, the federal law would pre-empt that of
the State.
III
We now must decide whether ordinary legal principles of
pre-emption, or the special McCarran-Ferguson Act antipre-emption
rule, governs this case. The lower courts held that the
McCarran-Ferguson Act's special anti-pre-emption rule applies, and
instructs courts not to "construe" the Federal Statute to
"invalidate, impair, or supersede" that of the
38
State. 15 U. S. C. § 1012(b). By its terms, however, the Act
does not apply when the conflicting federal statute
"specifically relates to the business of insurance." Ibid.
(emphasis added). In our view, the Federal Statute in this case
"specifically relates to the business of insurance"-therefore the
McCarran-Ferguson Act's special anti-pre-emption rule does not
apply.
Our conclusion rests upon the McCarran-Ferguson Act's language
and purpose, taken together. Consider the language-"specifically
relates to the business of insurance." In ordinary English, a
statute that says that banks may act as insurance agents, and that
the Comptroller of the Currency may regulate their
insurance-related activities,
"relates" to the insurance
business. The word "relates" is highly general, and this Court has
interpreted it broadly in other pre-emption contexts. See,
e.
g., Pilot Life Ins. Co. v.
Dedeaux, 481 U. S. 41, 47 (1987)
(words" 'relate to'" have "'broad common-sense meaning, such that a
state law "relate[s] to" a benefit plan " ... if it has a
connection with or reference to such a plan"''') (quoting
Metropolitan Life Ins. Co. v.
Massachusetts, 471 U. S. 724, 739
(1985), in turn quoting
Shaw v.
Delta Air Lines,
Inc., 463 U. S.
85, 97 (1983));
Morales v.
Trans World Airlines,
Inc., 504 U. S.
374, 383-384 (1992) (interpreting similarly the words"
'relating to'" in the Airline Deregulation Act of 1978).
More importantly, in ordinary English, this statute
"specifically" relates to the insurance business.
"Specifically" can mean "explicitly, particularly, [or]
definitely," Black's Law Dictionary 1398 (6th ed. 1990), thereby
contrasting a
specific reference with an
implicit
reference made by more general language to a broader topic. The
general words "business activity," for example, will sometimes
include, and thereby implicitly refer, to insurance; the particular
words "finance, banking, and insurance" make that reference
explicitly
and specifically.
39
Finally, using ordinary English, one would say that this statute
specifically relates to the
"business of insurance." The
statute explicitly grants national banks permission to "act as the
agent for any fire, life, or other insurance company," to
"solici[t] and sel[l] insurance," to "collec[t] premiums," and to
"receive for services so rendered ... fees or commissions," subject
to Comptroller regulation. 12 U. S. C. § 92. It also sets forth
certain specific rules prohibiting banks from guaranteeing the
"payment of any premium on insurance policies issued through its
agency ... " and the "truth of any statement made by an assured in
filing his application for insurance."
Ibid. The statute
thereby not only focuses directly upon industry-specific selling
practices, but also affects the relation of insured to insurer and
the spreading of risk-matters that this Court, in other contexts,
has placed at the core of the McCarran-Ferguson Act's concern. See
Union Labor Life Ins. Co. v.
Pireno, 458 U. S. 119, 129 (1982)
(citing
Group Life &
Health Ins. Co. v.
Royal
Drug Co., 440 U.
S. 205 (1979); see also
Department of Treasury v.
Fabe, 508 U.
S. 491, 502-504 (1993).
Consider, too, the McCarran-Ferguson Act's basic purposes. The
Act sets forth two mutually reinforcing purposes in its first
section, namely, that "continued regulation and taxation by the
several States of the business of insurance is in the public
interest," and that
"silence on the part of the Congress
shall not be construed to impose any barrier to the regulation or
taxation of such business by the several States." 15 U. S. C. §
1011 (emphasis added). The latter phrase, particularly the word
"silence," indicates that the Act does not seek to insulate state
insurance regulation from the reach of all federal law. Rather, it
seeks to protect state regulation primarily against
inadvertent federal intrusionsay, through enactment of a
federal statute that describes an affected activity in broad,
general terms, of which the insurance business happens to
constitute one part.
40
The circumstances surrounding enactment of the McCarran-Ferguson
Act suggest the same. Just prior to the law's enactment, this
Court, in
United States v.
SouthEastern Underwriters
Assn., 322 U. S.
533 (1944), held that a federal antitrust law, the Sherman Act,
applied to the business of insurance. The Sherman Act's highly
general language said nothing specifically about insurance. See 15
U. S. C. § 1 (forbidding every "contract, combination ... or
conspiracy, in restraint of trade or commerce among the several
States"). The Sherman Act applied only to activities in or
affecting interstate commerce.
Hopkins v.
United
States, 171 U. S.
578, 586 (1898). Many lawyers and insurance professionals had
previously thought (relying, in part, on this Court's opinion in
Paul v.
Virginia, 8 Wall. 168, 183 (1869), and other
cases) that the issuance of an insurance policy was not a
"transaction of commerce," and therefore fell outside the Sherman
Act's scope.
South-Eastern Underwriters told those
professionals that they were wrong about interstate commerce, and
that the Sherman Act did apply. And
South-Eastern
Underwriters' principle meant, consequently, that other
generally phrased congressional statutes might also apply to the
issuance of insurance policies, thereby interfering with state
regulation of insurance in similarly unanticipated ways.
In reaction to
South-Eastern Underwriters, Congress
"moved quickly," enacting the McCarran- Ferguson Act "to restore
the supremacy of the States in the realm of insurance regulation."
Fabe, supra, at 500. But the circumstances we have just
described mean that
"restor[ationJ" of "supremacy" basically
required setting aside the unanticipated effects of
South-Eastern Underwriters, and cautiously avoiding similar
unanticipated interference with state regulation in the future. It
did not require avoiding federal preemption by future federal
statutes that indicate, through their "specific relat[ionJ" to
insurance, that Congress had focused upon the insurance industry,
and therefore, in all
41
likelihood, consciously intended to exert upon the insurance
industry whatever pre-emptive force accompanied its law. See also,
e. g., insofar as relevant, 91 Congo Rec. 483 (1945)
(statement of Sen. O'Mahoney, floor manager of the Act, that the
Act was intended to be "a sort of catch-all provision to take into
consideration other acts of Congress which might affect the
insurance industry, but of which we did not have knowledge at the
time");
ibid. (similar statement of Sen. Ferguson).
The language of the Federal Statute before us is not general. It
refers specifically to insurance. Its state regulatory implications
are not surprising, nor do we believe them inadvertent. See Part
II,
supra. Consequently, considerations of purpose, as well
as of language, indicate that the Federal Statute falls within the
scope of the McCarranFerguson Act's "specifically relates"
exception to its antipre-emption rule. Cf.
John Hancock Mut.
Life Ins. Co. v.
Harris Trust and Sav. Bank, 510 U. S. 86, 98 (1993)
(adopting the United States' view that language in the Employee
Retirement Income Security Act of 1974 defining a "guaranteed
benefit policy" as a certain kind of "insurance" policy "obviously
and specifically relates to the business of insurance") (internal
quotation marks omitted).
We shall mention briefly why we are not convinced by several of
the parties' remaining arguments. Florida says that the Federal
Statute "specifically relates" to banking, not to insurance. But a
statute may specifically relate to more than one thing. Just as an
ordinance forbidding dogs in city parks specifically relates to
dogs and to parks, so a statute permitting banks to sell insurance
can specifically relate to banks and to insurance. Neither the
McCarran-Ferguson Act's language, nor its purpose, requires the
Federal Statute to relate
predominantly to insurance. To the
contrary, specific detailed references to the insurance industry in
proposed legislation normally will achieve the McCarranFerguson
Act's objectives, for they will call the proposed leg-
42
islation to the attention of interested parties, and thereby
normally guarantee, should the proposal become law, that Congress
will have focused upon its insurance-related effects.
An
amicus argues that our interpretation would give the
Act "little meaning," because "whenever a state statute 'regulates'
the business of insurance, any conflicting federal statute
necessarily will 'specifically relate' to the insurance business."
Brief for American Council of Life Insurance as
Amicus
Curiae 4. We disagree. Many federal statutes with potentially
pre-emptive effect, such as the bankruptcy statutes, use general
language that does not appear to "specifically relate" to
insurance; and where those statutes conflict with state law that
was enacted "for the purpose of regulating the business of
insurance," the McCarran-Ferguson Act's anti-pre-emption rule will
apply. See generally
Fabe, supra, at 501 (noting the
parties' agreement that federal bankruptcy priority rules, although
conflicting with state law, do not "specifically relate" to the
business of insurance).
The lower courts argued that the Federal Statute's 1916 date of
enactment was significant, because Congress would have then
believed that state insurance regulation was beyond its "Commerce
Clause" power to affect. The lower courts apparently thought that
Congress therefore could not have intended the Federal Statute to
pre-empt contrary state law. The short answer to this claim is that
there is no reason to think that Congress believed state insurance
regulation beyond its constitutional powers to affect-insofar as
Congress exercised those powers to create, to empower, or to
regulate national banks. See
McCulloch v.
Maryland, 4
Wheat. 316 (1819);
Farmers' and Mechanics' Nat. Bank v.
Dearing, 91 U.
S. 29, 33 (1875); see also,
e. g., Easton v.
Iowa, 188 U. S., at 238. We have explained, see Part II,
supra, why we conclude that Congress indeed
did
intend the Federal Statute to pre-empt conflicting state law.
43
Finally, Florida points to language in
Fabe, which states
that the McCarran- Ferguson Act "imposes what is, in effect, a
clear-statement rule" that forbids pre-emption "unless a federal
statute specifically requires otherwise." 508 U. S., at 507.
Florida believes that this statement in
Fabe means that the
Federal Statute would have to use the words "state law is
pre-empted," or the like, in order to fall within the
McCarran-Ferguson Act exception. We do not believe, however, that
Fabe imposes any such requirement. Rather, the quoted
language in
Fabe was a general description of the Act's
effect. It simply pointed to the existence of the clause at issue
here-the exception for federal statutes that "specifically relat[e]
to the business of insurance." But it did not purport
authoritatively to interpret the "specifically relates" clause.
That matter was not at issue in
Fabe. We therefore believe
that
Fabe does not require us to reach a different result
here.
For these reasons, the judgment of the Court of Appeals is
reversed.
It is so ordered.
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