The Chase Manhattan Bank v. Sailboat Apartment Corp.

Background

Chase Manhattan Bank and Sailboat Apartment Corp. were involved in a dispute decided by the District Court of Appeal of Florida, Third District. The Supreme Court granted review in a summary disposition, vacated the appeals court’s judgment, and sent the case back to the state court to determine whether the bank gave up (waived) the special venue protection created by the National Bank Act, 12 U.S.C. §94. The opinion cites an earlier Supreme Court decision for guidance.

Reasoning

The central question the Justices ordered the lower court to answer is whether the bank waived the statutory protection that limits where a national bank can be sued. The Court did not issue a full written opinion resolving the law on venue; instead it vacated the judgment below and remanded for a waiver determination, directing attention to the Court’s recent National Bank decision. Because this was a summary action, the Supreme Court left the factual and legal fact-finding about waiver to the state court.

Real world impact

The ruling does not finally decide the venue protection’s validity in this case. Instead, the state court must now decide whether the bank’s conduct or its alleged corporate alter ego caused the bank to lose that protection. The outcome will determine whether the bank must defend itself in the forum chosen by its opponents or retains its special federal venue shield.

Dissents or concurrances

Justice Stevens, joined by Justice Brennan, dissented from the Court’s summary action, arguing a remand was unsupported and that the state courts likely relied on waiver; he would have denied review.