Barnett Bank of Marion Cty., N. A. v. Nelson, 517 U.S. 25 (1996)

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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 insurance"—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


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