United States v. Third Nat’l Bank of Nashville, 390 U.S. 171 (1968)

Author: Justice Harlan

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United States v. Third Nat’l Bank of Nashville, 390 U.S. 171 (1968)

MR. JUSTICE HARLAN, whom MR JUSTICE STEWART joins, concurring in part and dissenting in part.

My understanding of the procedural structure of the Bank Merger Act of 1966,{1} based on our decision last Term in United States v. First City National Bank of Houston, 386 U.S. 361, 364, is that the Act requires the District Court to engage in a two-step process. First, the District Court must decide whether the merger, considered solely from an antitrust viewpoint, would violate the Clayton Act standard embodied in the Bank Merger Act. If it would not, the inquiry is over. If there would be a violation, then the District Court must go on to decide whether "the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served."{2} In making the latter decision, the District Court must again evaluate the antitrust factor, this time in a less polar way. For a comparatively minor violation of the Clayton Act, like that in this case, obviously may be more readily outweighed by factors relating to "convenience and needs" than may a relatively serious infraction.

Turning to the application of the Act to this case, the first question is whether the merger, as an antitrust matter, would violate the Clayton Act. I continue to disagree, particularly in the banking field, with the "numbers game" test for determining Clayton Act violations which was adopted by this Court in United States v. Philadelphia National Bank, 374 U.S. 321. However, I consider myself bound by that decision, and, under its dictates, I concur in the Court’s finding that this merger would violate the Act.

I also concur in the Court’s decision that this case must be remanded so that there may be a new application of the second-step balancing process. In this case, which was decided before our decision in Houston Bank, supra, the District Court either omitted the first of the two indicated procedural steps or concluded, incorrectly, that the merger would not violate the Clayton Act.{3} In either event, the error may have caused the District Court to misconceive the antitrust "threshold" at which the second-step balancing process was intended to come into play. This, in turn, may have led the court to give the "anticompetitive effect" of the merger a different weight in the balance than was intended by the framers of the Bank Merger Act. Hence, the case must be remanded to the District Court so that it may reweigh the competing factors in light of the correct antitrust threshold. With regard to the "convenience and needs" side of the balance, I am in accord with the Court’s ruling that a merger should not be approved under the 1966 Act unless the District Court finds that the benefits conferred upon the community by the merger could not reasonably have been achieved in other ways. Unlike the Court, however, I conclude from the record that the District Court did make adequate findings on this issue. The record reveals that many witnesses testified that Nashville Bank had problems of real magnitude, the greatest being to find replacements for key executives. Mr. Weaver, the leader of the group which purchased control of the bank not long before the merger, testified that initially his group had intended to operate the bank themselves, but that talks with many bankers had convinced him that his group could not solve the bank’s problems. The head of an executive placement firm testified that he did not believe that he could have found new executives for Nashville Bank, in light of its overall situation.{4} Although there was testimony in rebuttal, including that of another recruiter of executives, to the effect that the problems were not unsolvable, I cannot conclude that the District Court committed error when it held that,

[w]hile there is some conflict, the preponderance of the evidence is that it would have been practically impossible within any reasonable period of time to obtain adequate managerial replacements either from within the bank or from the outside, a product of the bank’s failure . . . to provide itself with the facilities, procedures and equipment required to maintain a competitive posture.

260 F.Supp. 869, 881.

In sum, what I would consider to be the scope of the proceedings on remand is this. In light of our holding that a Clayton Act violation has been made out, further consideration of the first-step antitrust issue by the District Court is foreclosed. Believing, as I do, but contrary to the Court, that the findings already made by the District Court as to the alternatives to merger are adequate, in my view, the only question for the District Court to consider respecting the second step is whether, because of its character in light of the antitrust standard now set forth, the antitrust violation should yield to other factors bearing on public "convenience and needs."

1. 80 Stat. 7, 12 U.S.C. § 1828(c) (1964 ed., Supp. II).

2. Bank Merger Act of 1966, amending § 18(c)(5)(b) of the Federal Deposit Insurance Act, 12 U.S.C. § 1828(c)(5)(b) (1964 ed., Supp. II).

3. The District Court’s opinion is unclear as to whether the court considered it necessary to make a discrete finding under the Clayton Act.

4. An account of Nashville Bank’s overall situation appears in the Court’s opinion, ante at 175-176.


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Chicago: Harlan, "Harlan, J., Concurring and Dissenting," United States v. Third Nat’l Bank of Nashville, 390 U.S. 171 (1968) in 390 U.S. 171 390 U.S. 194–390 U.S. 195. Original Sources, accessed August 15, 2022, http://www.originalsources.com/Document.aspx?DocID=4UPH434W64WQRFK.

MLA: Harlan. "Harlan, J., Concurring and Dissenting." United States v. Third Nat’l Bank of Nashville, 390 U.S. 171 (1968), in 390 U.S. 171, pp. 390 U.S. 194–390 U.S. 195. Original Sources. 15 Aug. 2022. http://www.originalsources.com/Document.aspx?DocID=4UPH434W64WQRFK.

Harvard: Harlan, 'Harlan, J., Concurring and Dissenting' in United States v. Third Nat’l Bank of Nashville, 390 U.S. 171 (1968). cited in 1968, 390 U.S. 171, pp.390 U.S. 194–390 U.S. 195. Original Sources, retrieved 15 August 2022, from http://www.originalsources.com/Document.aspx?DocID=4UPH434W64WQRFK.