## Facts

- A federal savings and loan association, through a wholly owned subsidiary, sought to organize a national bank limited to trust and fiduciary services and lacking authority to accept deposits or make loans.
- The Comptroller of the Currency granted preliminary approval and later issued a certificate of authority for the limited-purpose national bank, over objections from competing commercial banks.
- A competing bank and a bankers association sued for declaratory and injunctive relief, alleging the approval and related conduct violated federal banking statutes (including the National Bank Act, the Home Owners’ Loan Act, and the Bank Holding Company Act) and federal antitrust laws.
- The district court granted summary judgment against the Comptroller, declared the approval invalid, ordered revocation of the certificate, and dismissed claims against other defendants as moot.
- While the appeal was pending, Congress enacted a statute amending the National Bank Act to authorize national banks whose operations are limited to those of a trust company, to exclude such entities from “bank” status under the Bank Holding Company Act, and to apply the amendment retroactively to this dispute.

## Issues

1. Whether competitor banks and their trade association had Article III standing to challenge the Comptroller’s approval based on competitive injury.
2. Whether the Comptroller had statutory authority to charter a national bank limited to fiduciary powers and barred from deposit-taking and lending.
3. Whether the retroactive statutory amendment validating trust-only national banks required reversal of the judgment invalidating the Comptroller’s approval and revocation order.
4. Whether claims against other defendants and remaining statutory and antitrust theories were properly dismissed as moot.

## Decision

- The court held the competing bank had standing because it showed a sufficient prospect of economic injury from the challenged approval.
- The court also held the bankers association had standing.
- The court reversed the judgment invalidating the Comptroller’s approval because the retroactive amendment to the National Bank Act authorized the limited-purpose trust company model and validated the challenged agency action.
- The court reversed the revocation order directed to the Comptroller.
- The court held the dismissal of claims against other defendants as moot could not stand in light of the reversal and remanded for further proceedings on claims not resolved by the retroactive validation.

## Legal Principles

- Competitor standing exists where a plaintiff shows a sufficient likelihood of economic injury from agency action benefiting a rival in a regulated market.
- When Congress amends a statute to authorize a contested regulatory practice and expressly applies the amendment retroactively, courts apply the new law to pending cases and treat covered prior agency actions as validated.
- Retroactive validation of an agency’s statutory authority does not automatically dispose of distinct statutory or antitrust claims concerning related conduct; such claims may remain justiciable and require adjudication on remand.

## Conclusion

The Third Circuit recognized competitor-bank standing, reversed the invalidation of the Comptroller’s approval because Congress retroactively authorized trust-only national banks and excluded them from Bank Holding Company Act treatment, and remanded for consideration of remaining claims that were not necessarily mooted by the statutory change.


National State Bank of Elizabeth, N.J. v. Smith, 591 F.2d 223 (3d Cir. 1979)